Australia-China trade may climb to A$100b this year

Beijing: Australia's trade with China may rise to as much as A$100 billion (Dh330 billion) this year, according to Austrade, the government's trade and investment development agency.

Trade between Australia and its biggest trading partner increased by about 30 per cent to A$86 billion in the 2009 financial year, Jeff Turner, Austrade's Senior Trade Commissioner in the southern Chinese city of Guangzhou, said in an interview yesterday during a programme held in Sydney.

"When you consider that was during the global fin-ancial crisis, that's quite spectacular," Turner said.

"If that trend continues, we could see bilateral trade this financial year get to A$100 billion."

Australia and China are set to resume negotiations on a free-trade agreement that stalled more than a year ago, Australian Trade Minister Simon Crean said last week.

He reaffirmed Chinese Vice-Premier Li Keqiang's statement last October that China remains committed to a pact.

Strained relations

Establishing a free-trade agreement between the two countries would boost the Australian economy by more than A$146 billion over 20 years, according to a study by the Centre for International Economics, prepared for the Australian China Business Council.

Relations between the two countries have been strained in recent months over a failed investment deal with Rio Tinto Group and the detention of Rio employee Stern Hu by China.

A standoff over the mainland's reluctance to allow agricultural imports from Australia could also be a hurdle, Crean said.

Overseas investment

Discussions on a bilateral free-trade agreement — which began in May 2005 — hit a wall following the 13th round of talks in December 2008, after the two parties became deadlocked on issues including overseas investment into China and the mainland's restrictions on agricultural imports from Australia.

"The stumbling block remains, in essence, the sensitivity surrounding agriculture," Crean said in comments to reporters on February 16.

"It is clearly impossible for Australia to accept an FTA outcome that is less than China has already offered to New Zealand when it comes to agriculture."

New Zealand became the first industrialised nation to put into effect a free-trade agreement with China in October 2008.

Iron ore is Australia's biggest export to China, accounting for some 56 per cent shipments in the 2009 financial year, according to the Australian Department of Foreign Affairs and Trade.

China is the world's biggest consumer of iron ore. Clothing and telecommunications equipment accounted for China's biggest exports to Australia.

Australia, which exports A$5.1 million of services to China, wants to increase its share in this area, Turner said.

"We're trying to diversify the trade relationship," he said. "There's a lot of opportunity in services," he added.