Before entering the Chinese business market, there are a number of factors to consider, including culture, politics and business etiquette. Austrade can help Australian companies become familiar with local market conditions and help develop export opportunities through a number of market and Australian services. The establishment of the China-Australia Free Trade Area facilitates not only trade and investment between the two countries, but also the stable development of the Asia-Pacific region and the liberalization of world trade. The first round of negotiations took place in Sydney on May 23, 2005. Between 2007 and 2050, China is expected to account for nearly half of a 75% increase in global food demand. While the shortage of resources will limit Australia`s ability to become an “Asia food bowl,” there could be a competitive position for Australia as an “Asia delicatessen.” Already, Australian companies are gaining niche sales in high-end markets by chartering the clean, green image of the “Made in Australia” label. Australia`s agricultural exports to China have almost tripled over the past five years to a record $8.7 billion (Chart 4). China is now our main agricultural export market. But of course, the reward is worth the challenge.
These trade policy developments will improve market access and help Australian exporters fully exploit the potential of the world`s next largest economy. There will be a labour and leave agreement in which Australia will grant up to 5,000 visas to Chinese nationals for work and vacationers.  The free trade agreement between the two countries was signed on June 17, 2015 in Canberra, Australia.  The agreement will follow the usual contracting process, during which it will enter into force when China completes its domestic legal and legislative procedures and in Australia, the review by the Standing Committee on the Treaties of the Australian Parliament and the Committee on Foreign Affairs, Defence and Trade of the Senate.  Madeleine King, Labour`s trade policy critic, also strongly supported the Morrison government`s plan to bring China to the World Trade Organization for barley tariffs – a move against which trade experts warned that it could take up to three years before it is resolved. Separately, Australia and China also signed a Memorandum of Understanding this week for the implementation of formal renminbi compensation agreements (RMB) in Australia. This will make it easier for Australian exporters to conduct cross-border RMB transactions – with the potential to reduce the cost of these transactions by 2 to 3% by reducing the need to hedge against foreign exchange risks. These measures are another asset to Australia`s export competitiveness.
ChAFTA concludes the government`s “Trifecta of Trade” with Australia`s three main export markets after concluding similar agreements with Japan and South Korea earlier this year. Last year, these three North Asian markets together accounted for more than half of Australia`s exports. King supported this approach and said it was important for Australia and China to approve the rules and that the WTO procedure is “a way to create common ground between our two nations.” More broadly, King said, “I think the spirit between the two nations is a little broken in relation to our overall relationship.” “I don`t think we should give it up,” she said. “It`s a whole series of products going to China, and we don`t want to put that at risk, even though, at the moment, many of them are clearly part of China`s trade movements.” The current tariffs on Australian beef imports into China is between 12 and 25 per cent, and our modelling is based on a total removal of duties within a decade.