2010-02-23 China SME Online

AUSTRALIA'S bilateral trade with China could rise to as much as A$100 billion (US$91 billion) this year, according to Austrade, the Australian Government's trade and investment development agency.

Trade between Australia and its biggest trading partner increased by about 30 percent to A$86 billion in the 2009 financial year, Jeff Turner, Austrade's Senior Trade Commissioner in Guangzhou, said in an interview yesterday during an event in Sydney.

"When you consider that was during the global financial crisis, that's quite spectacular," Turner said. "If that trend continues, we could see bilateral trade this financial year get to A$100 billion."

Australia and China are set to resume negotiations on a free trade agreement that stalled more than a year ago, Australian Trade Minister Simon Crean said last week, reaffirming Chinese Vice Premier Li Keqiang's statement in October that China remains committed to a pact.

Establishing a free trade pact between the two countries would boost the Australian economy by more than A$146 billion over 20 years, according to a study by the Center for International Economics, prepared for the Australian China Business Council.

Relations between the two countries have been strained in recent months over a failed investment deal with Rio Tinto Group and the detention of Rio employee Stern Hu by China. A standoff over China's reluctance to allow agricultural imports from Australia could be a hurdle, Crean said.

Talks on a bilateral free trade agreement, which began in May 2005, hit a wall following the thirteenth round in December 2008, after the two parties disagreed on issues including overseas investment in China and the mainland's limits on agricultural imports from Australia.

New Zealand became the first industrialized nation to put into effect a free trade pact with China in October 2008.

Iron ore is Australia's biggest export to China, accounting for some 56 percent of shipments in the 2009 financial year, according to the Australian Department of Foreign Affairs and Trade. China is the world's biggest consumer of iron ore. Clothing and telecommunications equipment accounted for China's biggest exports to Australia.

Australia, which exported A$5.1 million in services to China, wanted to increase its share in this area, Turner said yesterday.