The Export Council of Australia (ECA) strongly supports the China-Australia Free Trade Agreement (ChAFTA) and research shows that Australian businesses do too. ChAFTA represents a desirable outcome that will advance Australian trade, especially given the significant achievement of China affording Most Favoured Nation status to Australia.
China is Australia’s largest two-way trading partner in goods and services, valued at $160 billion in 2013-14. China is also our largest export destination ($100 billion in 2013-14) and our largest source of merchandise imports, valued at $50 billion in 2013-14. However, Australia faces increasing competition in China from the likes of the United States, Canada and the European Union, hence it is imperative that ChAFTA enters into force as soon as practicable so that Australian exporters can remain competitive and grow their market share.
In 2014 the ECA launched a longitudinal survey, Australia’s International Business Survey (AIBS), with Austrade, Efic and the University of Sydney. The survey is designed to capture data on the international business activity of Australian companies. The first survey, conducted in 2014, captured data from over 1,600 Australian exporters, making it the most comprehensive investigation into Australia’s international business activity in more than 15 years. AIBS 2015, which was released on 30 July 2015, resulted in the collection of fully completed and validated responses from 1,237 companies involved in international business.
Drawing on the results from AIBS 2015, it is evident the business community in Australia are supportive of the opening up of market opportunities in China, as well as the need for a Free Trade Agreement (FTA). Some of the key findings relating to ChAFTA include:
- Australian companies selected China as the top market with which an FTA was most desired.
- Australian companies ranked China as the second most popular target market for new business.
- China was identified by AIBS 2015 participants as the second top export market, behind the United States.
- A total of 248 companies (representing 20 per cent of all survey respondents) nominated China as either their first or second most important overseas market.
- Among these companies, 23 per cent are from the agricultural, forestry and fishing sector, and 20 per cent are manufacturing companies.
- Among the service-oriented industries, Education and training emerged as the top sector that considers China to be its most important market.
- Over 79 % of companies ranked prospects of strong growth in the country are the main reason why many Australian companies considered China to be their most important new target market.
- Compared to the 2014 results, Australian companies indicated a very positive outlook on China, with 60 per cent indicating that they perceive future prospects in the country to be better.
The AIBS data clearly reinforces the significance of China as a trading partner, providing further justification from the business community on the need for ChAFTA to enter into force.
The ECA acknowledges that the agreement reached between the two countries is not a “perfect” outcome. As with other agreements, ChAFTA represents a compromise outcome reflecting the respective negotiating strengths of the parties and their respective political sensitivities. Nevertheless, Australia has secured a good deal and we must maximise the opportunity that exists as not doing so would not only be short sighted but potentially highly damaging to Australia-China relations.
Who are we?
A not-for-profit, membership based organisation, the Export Council of Australia is the peak industry body representing Australia’s exporters and importers, particularly SMEs. With a membership base of 1,000 and a reach of 15,000, the ECA represents companies of all sizes and across a wide range of industry sectors, including services exporters. The ECA’s core activities include research, advocacy, skills development and events.
Export Council of Australia
T: 02 8243 7400