China overtook Japan to become Australia’s No. 1 export destination in 2009 and the two-way trade totalled more than $180b in 2017. Bulk commodities—iron ores and concentrates, coal and gold — are the chief exports, but Australia’s 45,000 exporters are also gaining traction in agriculture (e.g. dairy and meat) and services (e.g. aged care and education).
China’s rebalancing toward a more consumer-oriented economy and rising middle class is weighing heavily on hard commodity producers, but the transition will support Australian agricultural and service exports. Indeed, the surge in Australia’s exports of both farm products and services over the last three years is a good barometer of Chinese rebalancing.
China is also Australia’s second largest source of visitor arrivals in 2017 and its largest source of foreign students. Chinese visitors hit 1.36m in 2017—falling short of New Zealand. But arrivals in the year to September suggest China is on track to be the largest source of arrivals in 2018. The number of students topped 231,000 in 2017 (ahead of the next five largest countries with a combined enrolment of 222,000).
Sino-Australian investment relations lag behind trade, tourism and education. China ranks 15th as an investor in Australia, owning a portfolio of just A$65b in 2017. This has fallen from the A$84b recorded in 2016 and is well behind the No. 1 investor, the US, with A$897b, and the UK with A$481b.
Australian investment into China has grown at a much stronger rate, though this did come off a touch in 2017— A$77b down from A$83b in 2016. The US ($664b) and UK ($333b) remain the leading destinations for Australia’s foreign investment.