China overtook Japan to become Australia’s largest export destination in 2009. Total goods and services trade amounted to more than $214 billion in 2018. Over the last five years, total trade has increased on average 10% per annum. Bulk commodities—iron ores and concentrates, coal and gold—are the chief exports, but Australian exporters are also gaining traction in agriculture (e.g. dairy and meat) and services (e.g. tourism, aged care and education).
China’s rebalancing toward a more consumer-oriented economy and rising middle class will support demand for Australian agricultural and services exports.
On the services front, China overtook New Zealand in 2018 to become Australia’s largest source of tourists. Chinese visitors hit 1.42 million in 2018, and have grown on average 15% per annum since 2015. The number of students topped 256,000 in 2018 (ahead of the next five largest countries with a combined enrolment of 235,000).
Chinese-Australian investment relations lag somewhat behind trade, tourism and education. China ranks ninth highest for investment in Australia, owning a portfolio of $64 billion in 2018. This has fallen from $85 billion in 2016 and is well behind the largest investors in Australia, including the US ($940 billion) and the UK ($575 billion).
Australian investment in China has grown at a much stronger rate, though it declined to $75 billion in 2018 from as high as $83 billion in 2016. The US ($719 billion) and UK ($408 billion) remain the leading destinations for Australia’s foreign investment.