Chinese free trade agreement with Australia on the cards

Thursday, 6 November 2014  Media Alerts

​"There is everything to play for with the China Free Trade Agreement (FTA)," said the UNSW Business School's Jane Qiu. "However domestic factors in China will have a direct impact on its FTA negotiation with Australia. An FTA with Australia will jeopardise some interest groups in China, and the changing power between these groups will have a direct impact on the attitude and focus of the Chinese government towards its FTA negotiation in Brisbane."​​

A trade agreement between China and Australia is tipped to be signed following the Brisbane's G20 summit, when China's president Xi Jinping is expected to make a state visit.

Senior Lecturer Jane Qiu from UNSW's Business School possesses a broad range of i​ndustrial experience in China and can analyse the implications of an FTA with Australia.

She said "the middle class in China is growing rapidly, and they have a strong demand for high quality agricultural products. However in China the prices are high for imported goods and many middle class families now buy directly from overseas companies online, including milk powders from Australia. It's called "hai tao" in Chinese."

Many of the regions that produce agricultural products are in the western parts of China, which are very sensitive in terms of stability, and so she said the Chinese government will try to tread softly with the implications of the FTA. Trade negotiations between Australia and China have spanned nine years and Australia's 6,500 dairy farmers are eagerly watching developments after losing out on FTAs with Japan and Korea.

Jane Qiu said China is using the FTA as one of a raft of diplomatic levers however it is connected to many other measures, such as coal tariffs. "Economic restructuring in China has led to changes in the energy demand in China. This is one of the causes of the falling coal price, which does jeopardise the domestic coal providers. The government is trying to protect them with a higher tariff, and this is a negative element in the FTA negotiations."

Prior to her academic career, Jane Qiu worked in both private and public sectors in China. She said "the current government, led by Xi and Li, has shown it is committed to deepening the economic reform. Ever since the era of Premier Zhu, forming foreign trade agreements - such as entering the WTO - have been an important measure for reformists in the government to push forward economic reforms. FTAs with Australia will be supported as a motivation to further reform China's banking and investment system."

For further comment call Jane Qiu on 02 9385 7140, 0432 033 624, or Email janeq@unsw.edu.au

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