China and Australia Sign Bilateral Free Trade Agreement

On 17 Nov 2014, Chinese President Xi Jinping had a conference with Australian Prime Minister Tony Abbott, during which the negotiation of the Sino-Australian free trade agreement was concluded. China MOFCOM announced that the agreement is the most comprehensive and high level free trade agreement China has signed with an Asian-pacific economy. The historic policy will bring with it tremendous business chances for numerous sectors of Australia’s economy.

After the policy becomes effective, 85% of Australian exports to China will be subject to zero tax. The percentage of Australian goods subject to tax free trade will increase gradually over the following 4 years. When fully implemented, 95% of all Australian goods exported to China will be duty free. Australian Prime Minister Abbott highlighted the abolition of tax on dairy products. The dairy industry makes a great contribution to the Australian economy and has annual revenue of 13 billion AUD. Australia’s Wine industry is another beneficiary. The value of Australian exports under the current tax system of 14%-30% is approximately 0.2 billion AUD. In four years when the tax is finally removed we can expect this figure to significantly increase.