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Australia-China economic partnership a win-win

Xinhua | Updated: 2017-03-24 10:39

SYDNEY - The economic partnership between China and Australia is one which is often described by experts and leaders alike as a "win-win," not only because of the mutually beneficial economic outcomes, but also the positive social and cultural outcomes it creates for the two nations.

In recent times, more so than ever, the bilateral relationship has blossomed as the China-Australia Free Trade Agreement (ChAFTA) was ratified in 2015, which enabled both countries to take a huge step forward towards a global-centric, shared economic direction.

The importance of this relationship cannot be overstressed, said Professor James Laurenceson, deputy director of the Australia-China Relations Institute at the University of Technology in Sydney, who told Xinhua on Wednesday that the ongoing partnership with China is fundamental to the development of Australia's ongoing economic future.

"More importantly has been its rise over the past ten years. If you look at that period, 50 cents out of every dollar of increased exports have gone to China," Laurenceson said.

The professor said that next to the strong financial ties in the history of the relationship, the people themselves have played a pivotal role in the development of the bonds shared between the two nations.

"Let us not forget the contribution of Chinese immigrants to Australia, they are fundamental in driving the trade links between the two countries," Laurenceson said.

There have been many notable events that have occurred throughout the bilateral partnership that have seen the ties between the two nations strengthened, from cultural and language exchanges, to the fact that in every major city in Australia, you can find a "Chinatown" precinct.

But now, and into the future, the main driver will continue to be ChAFTA, which the economist said has resulted in huge "tangible" benefits to both the Chinese and Australian economies, with a prime example to be found in the wine industry.

"Australian wine can get into China at the moment for a tariff of 5.6 percent, other countries face a tariff of 14 percent, and in two years, the tariff for Australian wine will disappear entirely, so it is no surprise that Australian exports of wine to China are growing at 40 percent," Laurenceson said.

The strength of the partnership will only increase through the treaties that have been signed, Laurenceson said, with China operating as a hub for global value chains which Australia is able to access.

"The reality is Australia is a small economy. We are never going to be a hub for global value chains," Laurenceson said.

"China already is, and will only become more so, so that is yet another good reason for Australia to be trading with China," the expert added.

Win-win outcomes are the cornerstone for the trading partnership between Australia and China, and the professor believes that in a time of growing concern about protectionism and the prospect of interruptions to trade, clarification of what trade essentially is is crucial.

"Trade only happens because two countries want it to, it is by definition, win-win. So more trade with China only happens because Chinese consumers and businesses, along with Australian consumers and businesses, want it to happen," Laurenceson said.

"The worst thing you could do is stop that from happening, because essentially you are ensuring that both countries will lose," said the expert.

With ChAFTA come increased opportunities for Australian connections with China, and Federal Trade Minister Steven Ciobo told Bloomberg on Tuesday that the agreement has driven growth immensely and will continue to do so in the future, and he plans on engaging in further talks during Premier Li Keqiang's visit to ensure the economic treaty is improved for both sides.

"We've got a strong focus on making sure that we continue to remove non-tariff barriers between our two countries to continue to make it easier for businesses to expand in terms of their investment ties and their trade ties," Ciobo said.

Laurenceson is convinced that along with the ever-increasing demand for Australia's goods and services from China, Chinese investment in Australia will result in a win for both countries.

The trade relationship between China and Australia is built upon the premise that each side is able to provide the other with what they need to spur their own economic growth.

In Australia's case, capital investment is one of the major challenges that inhibit its development, which China, particularly over the last two decades, has been able to provide.

"The fact that there is more Chinese investment, rather than Australian investment going into China, is a sign of strength, for both countries," Laurenceson said.

"China's demand for our exports also contributes to higher company profits and royalty payments from mining companies, both of which give the Federal and State governments more revenue to fund hospitals, education, infrastructure, and other crucial needs," said the expert.

This is a sentiment shared by Ciobo, who said that the powerful pro-trade message that has been continually delivered by China, as well as the direct positive actions in terms of economic growth and investment, are "proof positive" of the robust partnership between the two sovereign nations.

"We've seen continued strong growth in investment. We've seen continued strong growth in terms of two-way trade. Australian export volumes are up significantly, so the relationship, frankly, has never been as strong," Ciobo said.

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