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2014 Australia-China Trade Report

Engagement with China makes Australian companies more competitive and facilitates integration in global value chains.

New Perspectives on Australia-China Trade

As Australia’s bilateral relationship with China becomes more complex, so too does the way in which Australian businesses and households are benefitting from engagement with our biggest trading partner via diversifying trade, increasing investment, deepening integration into global value chains, and enhanced international competitiveness.

This Australia-China Trade Report breaks new ground by providing the first close analysis of the impact of bilateral trade between Australia and China on Australia’s business and economic integration with global value chains. It also extends the findings of previous reports by evaluating the latest flow-on effects of Australia-China trade for the Australian economy right down to the household level.

Commissioned by the Australia China Business Council (ACBC), this report expands on prior versions of the “Benefits to Australian Households of Trade with China Report (Household Report)” which, since 2009, have tracked the benefits to ordinary Australian households from trade with China. Through data collection, analysis and illustrative Australian business case studies, these reports have consistently demonstrated that the benefits from two-way Australia-China trade to average Australians – as consumers, workers, investors, tax payers and small businesses – have been positive and increasing over time.

Based on an exclusive business survey of more than 200 Australian ACBC member firms (the ACBC Australian-China Business Survey), case studies from different industries, and a new data source, the World Input-Output Database, this report demonstrates that, as in the preceding years of the resources investment boom, Australian governments, firms and households continue to benefit significantly and increasingly from Australia-China trade through growth in Gross Domestic Product (GDP), tax revenue, employment and real wages.

Australian businesses have a complex and sophisticated view of Chinese markets and have been adept and innovative in doing business in these markets. As doing business with China becomes more diverse and demanding, Australian firms have demonstrated that they are ready to embrace those opportunities, while being prepared for the challenges. Global value chains are reshaping global economic activity as China emerges as one of three key global production hubs, along with the United States and Europe.

Our Global Value Chain analysis, the Australia-China Business Survey and accompanying case studies confirm that the China market is providing new opportunities in industries such as agriculture, manufacturing, real estate, tourism, education and financial and professional services

For full analysis, download report:

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First Published March 2015