China

Bilateral relations

China is Australia’s largest export and import partner. Total goods and services trade amounted to more than $250 billion in 2019, about 27% of Australia’s foreign trade. Resources—iron ores and concentrates, natural gas, coal and gold—are the chief exports, but Australian exporters are also gaining traction in agriculture (e.g. beef and wool) and services (e.g. tourism, aged care and education). Beyond the pandemic, China’s rebalancing toward a more consumer-oriented economy and rising middle class should support demand for Australian agricultural and services exports. However, trade disruptions with China have created uncertainties for some Australian resources and agricultural exports.  

China is Australia’s largest source of tourists and student enrolments. Prior to the COVID-19 pandemic, tourist arrivals and student enrolments from China had risen steadily. The pandemic and associated international travel restrictions disproportionately hurt services trade in 2020. Ongoing international travel restrictions points to another challenging year for services exports in 2021.

Chinese-Australian investment relations lag somewhat behind trade, tourism and education. China ranks ninth highest for investment in Australia, owning a portfolio of $78 billion in 2019. This has fallen from as high as $85 billion in 2016, in part reflecting a slowdown in mining investment in recent years, and is well behind the largest investors in Australia, including the US ($983 billion) and the UK ($686 billion).

Australian investment into China reached a high of $85 billion in 2019, as corporates are attracted to China’s fast-growing economy and large domestic consumer market. The US ($837 billion) and UK ($507 billion) remain the leading destinations for Australia’s foreign investment.