China, Australia sign landmark free trade agreement

[jhungary]

Services? Note services GDP is largely related to domestic consumption (e.g. retail, F&B services, entertainment, housing, transport, telecom) and not exportable (unless by inbound tourism), and most consumption-driven economies have higher % in services (world average is 63.6%, US 79.7%, Japan 71.4%), so merchandise & commodities will continue to be main trade items.

Service is not just retail service, but things range from education (Overseas student to China), International Banking (Investment and portfolio), Security Trading, even Currency, and transport.

Right now, the only significant investment in Australia by China is the housing market. You don't see much Chinese Retail Chain opening up in Australia, but you have Japanese, US and even Canadian chain opening up the market in Australia. And no, I am not just talking about food...

Most Chinese business in Australia is opened by individual Chinese Migrant foreign capital flow on this field is lacking by China.

Another sector Chinese losing out to Japanese is transport and logistic, the current biggest Transport and Logistic service Toll Group is a Japanese subsidiary (Japan Post Holding Ltd)

Japan as ideal machinery market for Australia? The idea is a bit drastic and mind boggling, could you elaborate this more?

I am not saying japan is an Ideal dumping ground of Aussie Machinery, I said there is a market for Australian Machine in Japan, there are none in China, you may not know, but Australia is the top flight (or one of the top flight) in exporting heavy earth moving and mining machinery. Both of which have a significant customer base worldwide, including Japan.

Get some basics right, FTA is not supposed to favor either side, it is for breaking barriers and merging separated markets into a common one. Why "should" Chinese digest more Australian goods and services? "Should" as compulsory obligations? That sounds socialist planned economy to me, are you a fan of Soviet-style economy? Hey it's a market economy, now better with barriers removed, customer is king, if sellers are competitive then sure, if not then they deserve to fail big time, Chinese or Australian.

FTA is to open the market for both side, by removing trade restriction (usually quota) and tariff.

Problem is, for an open market, brand need to be able to put on shelf before customer can compare their price and quality. In this sense, I see a disadvantage in Australian brand in China, I can see quite a lot of Chinese brand selling in Australia (Haier Applicance, SsangYong Auto, Hinense Electronic and so on), but last time I went back to Hong Kong and then China a few months ago, there are virtually no Australian brand in China, beside Arnotts Tim Tam

Just do a little test, go to your nearest supermarket, and find out how much Australian brand are put in the retail shelf in your local supermarket. Here are 10 Australian brand that sold internationally, you can see how many of those is on the shelf in China.

Ansell (Personal Hygiene)
Arnotts (Food)
Billabong (Clothing)
Bulla or Peters (Dairy Product)
Rip Curl (Clothings)
Victa (Machinary)
Holden (Automotive)
Darrell Lea (Confessionary)
Michel Patisseries (Bakery Fanchaise)
Primo (Food, Farm product)

Things about Market economy is, you have to have a market to have an economy outlook, if there aren't even anyone selling those product, how do Australian brand have any market in China??

And if that is the case, then there is a serious problem, as any trader would look at how is the trading environment in a country before performing any investment, problem is, if the balance slide to one side, that is not a good environment, simply because most trader would want to have it as balance as possible, so you can utilise the infrastructure to deal business both way

I am not saying FTA should be benefit to anyone, or force either party to digest more of the goods, but a hostile trading environment would discourage investment. And from the current outlook, if China simply continue only importing primary resource and primary production, the market will be hostile to Australian investor, an open market should open to all trading, not just a couple category. In my opinion, this is why the Australian-Chinese trade volume is shrinking. Chinese's market to Australian company was not diverse enough.

 

[Shotgunner51]

And if that is the case, then there is a serious problem, as any trader would look at how is the trading environment in a country before performing any investment ....
I am not saying FTA should be benefit to anyone, but a hostile trading environment would discourage investment.

What hostile environment you are talking about? Hostile by whom to whom?

simply because most trader would want to have it as balance as possible, so you can utilise the infrastructure to deal business both way

If you are a trader from Melbourne, say in cheese, you look at macroscopic China-Australia trade balance data and want a balance before you consider selling your cheese to China?

Things about Market economy is, you have to have a market to have an economy outlook, if there aren't even anyone selling those product, how do Australian brand have any market in China??

What's stopping those Australian brands from setting up sales network in China after FTA?

 

[Gibbs]

Very good progress, trade barrier-free! This will further boost the already close trade relationship/investment between the two big economies!

By now FTA already signed with: ASEAN, Pakistan, Chile, New Zealand, Singapore, Peru, Hong Kong (CEPA), Macau (CEPA), Costa Rica, Iceland, Switzerland, South Korea, Australia.​

Under negotiation: GCC (Gulf Cooperation Council), Norway, Japan-Korea (trilateral), RCEP, ASEAN (FTA upgrade), Sri Lanka.​

Under consideration: Columbia, Maldives, Georgia, Moldova.​

@Gibbs @jhungary @Nihonjin1051 @AndrewJin @Azizam @Atanz you guys got any new biz ideas to make some fortune?

Great news.. Australian raw material's biggest market is China so no surprises there.. For the all the political rhetoric, The govt knows where the priorities lie.. Also i think the Sino/Lanka FTA is in the offing

Sri Lanka, China FTA to be signed in June 2015 | Daily News Online : Sri Lanka's National News

 

[Shotgunner51]

@Shotgunner51 I have a question, what can we import from Aussie besides agricultural products and raw materials?

I don't know bro cos I am not in trading business, I can only access historical data, track records. I am sure traders, middlemen, from all sides would explore future opportunities themselves, they make a living out of it.

Great news.. Australian raw material's biggest market is China so no surprises there.. For the all the political rhetoric, The govt knows where the priorities lie.. Also i think the Sino/Lanka FTA is in the offing

Sri Lanka, China FTA to be signed in June 2015 | Daily News Online : Sri Lanka's National News

Yes bro, Sino-Lanka FTA is already in the pipeline i.e. under final negotiation. Closed in June 2015? Wow that's fast, good news! Maybe I should setup a tea processing company in Colombo and sell to China, let's jointly invest?

As a quick summary of post #7, as per information from Commerce Dept of China govt, FTA signed:

ASEAN, Pakistan, Chile, New Zealand, Singapore, Peru, Hong Kong (CEPA), Macau (CEPA), Costa Rica, Iceland, Switzerland, South Korea, Australia​

FTA under negotiation:

GCC, Sri Lanka, Japan-Korea (trilateral), Norway, ASEAN (FTA Upgrade)​

 

[jhungary]

What hostile environment you are talking about? Hostile by whom to whom?

Hostile is a term, it mean you buy more than you sell, hence hostile, not like "War" hostile....

If you are a trader from Melbourne, say in cheese, you look at macroscopic China-Australia trade balance data and want a balance before you consider selling your cheese to China?

lol I was referring to the general trading environment, but yes, in your casse, if you are a cheese seller, you probably would have a bigger market than say an electronic maker.

What's stopping those Australian brands from setting up sales network in China after FTA?

I don't know, why do you think they are not stock in Chinese Shelf?

Look, I am not saying the FTA won't help trade between 2 side, but as I said, the problem between Chinese-Australian trade is not FTA itself, but the market, maybe people better than you or me can figure out this somehow but if China continue to only buy Iron Ore, Copper, Coal and produce from Australia, the trading environment is bleak if you get what I said.

 

[AndrewJin]

Hostile is a term, it mean you buy more than you sell, hence hostile, not like "War" hostile....




lol I was referring to the general trading environment, but yes, in your casse, if you are a cheese seller, you probably would have a bigger market than say an electronic maker.



I don't know, why do you think they are not stock in Chinese Shelf?

Look, I am not saying the FTA won't help trade between 2 side, but as I said, the problem between Chinese-Australian trade is not FTA itself, but the market, maybe people better than you or me can figure out this somehow but if China continue to only buy Iron Ore, Copper, Coal and produce from Australia, the trading environment is bleak if you get what I said.

Maybe those products you mention is all Australia is good at? For other stuff, why not just import from East Asia, better quality and cheaper?

 

[Shotgunner51]

Hostile is a term, it mean you buy more than you sell, hence hostile, not like "War" hostile....

OK new meaning learnt.
Then ... Germany sells more to US than buys from i.e. Germany hostile to US
Saudi Arabia is hostile to China
......
Hostilities everywhere

but if China continue to only buy Iron Ore, Copper, Coal and produce from Australia, the trading environment is bleak if you get what I said.

Simple, if that happens then the currency automatically drops, market will find way to adjust, isn't it?

 

[jhungary]

OK new meaning learnt.
Then ... Germany sells more to US than buys from i.e. Germany hostile to US
Saudi Arabia is hostile to China
......
Hostilities everywhere

Well, not exactly it means, it's just a layman term but generally, hostile market means the market have an unfair share of the market by external factors. Other market tendencies are collaborative and neutral market.

Simple, if that happens then the currency automatically drops, market will find way to adjust, isn't it?

Well, it is and it isn't, depending on the environment, and the trade volume, but to be fair, this is more than I can understand, so I probably best shut up on this occasion

Maybe those products you mention is all Australia is good at? For other stuff, why not just import from East Asia, better quality and cheaper?

Are you serious?

no offence, I honestly don't know are you trolling or you really just asked that...

 

[AndrewJin]

Well, not exactly it means, it's just a layman turn but generally, hostile market means the market have an unfair share of the market by external factors. Other market tendencies are collaborative and neutral market.



Well, it is and it isn't, depending on the environment, and the trade volume, but to be fair, this is more than I can understand, so I probably best shut up on this occasion



Are you serious?

no offence, I honestly don't know are you trolling or you really just asked that...

I'm not trolling, just telling u the general impression from Chinese. Every time Chinese think about Australia, for most, it's all about milk, wool, ore, and opera house in Sydney. I don't know a single big brand from Australia, I just know a lot of brands use raw materials from Australia. When I returned from Australia after an exchange program, I know there are two major supermarket chains in Australia and TimTam, which is seldom seen in Chinese markets, I bought it from Taobao.com in China.

Same with New Zealand, just without that Opera House.

 

[ahojunk]

I'm not trolling, just telling u the general impression from Chinese. Every time Chinese think about Australia, for most, it's all about milk, wool, ore, and opera house in Sydney. I don't know a single big brand from Australia, I just know a lot of brands use raw materials from Australia. When I returned from Australia after an exchange program, I know there are two major supermarket chains in Australia and TimTam.

Same with New Zealand, just without that Opera House.

@AndrewJin

What about our kangaroos and koalas? Don't tell me that you have forgotten them!

I believe they are the Aussie equivalents of your illi pika, right?

 

[AndrewJin]

@AndrewJin

What about our kangaroos and koalas? Don't tell me that you have forgotten them!

I believe they are the Aussie equivalents of your illi pika, right?

Illi pika is seldom known in China.
Pandas are spoiled.

I hope we can see more products from Australia, not just products from other countries using Australian raw materials.

 

[+4vsgorillas-Apebane]

Education is big at over 4 billion.

Lots of foreign students and they pay a lot more relative to locals. I feel so sorry for some foreign students who fails a unit at uni and have to repeat at great expense to themselves and their families.

 

[Place Of Space]

@Shotgunner51 I have a question, what can we import from Aussie besides agricultural products and raw materials?

wine, as far as I know.

 

[Shotgunner51]

@AndrewJin

What about our kangaroos and koalas? Don't tell me that you have forgotten them!

I believe they are the Aussie equivalents of your illi pika, right?

Outback Shanghai!

Victoria Filet freshly air freighted from Australia daily, wood fried grilled to medium rare, served on flat iron ... just awesome!

 

[jhungary]

I'm not trolling, just telling u the universal impression from general Chinese. Every time Chinese think about Australia, for most, it's all about milk, wool, ore, and opera house in Sydney. I don't know a single brand from Australia, I just know a lot of brands use raw materials from Australia, sorry.

Ok, I understand why you want to ask this question.

First of all, GDP in any developed country usually consist of a large domestic based GDP, basically, export and import only make money when you either have a large consumer base market or a cheap manufacturer base industry.

Most trade are in house, because of the currency value, problem with import is, you import goods and export money (Yes, import do still export) and if a developed country like you said import everything just because they are cheaper or of better quality, then that country, in this case, Australia will export heck a lot of money.

That will destabilised the currency value, and then Australia will either need to print more money to satisfy the local demand (We still spend Australian dollar inside Australia) or the financial system will be broken and we gone back to barter (Goods trades Goods) as the monetary base are not enough to fill the local need.

And seeing Financial Service require a stable currency, hence we simply can't import everything as long as they are cheap.

And about the second part of your question, the Australian brand are not popular in China due to the fact that not enough Australian ex-pat (Chinese-Australian or not) living in China, the demand of Australian product not actually big enough to exist, compare to 1.5 - 2 million Chinese in Australia (that's 15 to 20% of the entire Australian population), there are need for Chinese goods to satisfy the Chinese Ex-pat in Australia, that is the reason why you can find Chinese shop sold Chinese good in almost every suburb in Australia, but you won't see a lot of Australian shop service Aussie ex-pat in China, even if they do have one, it is few and far beyond.

Outback Shanghai!

Victoria Filet freshly air freighted from Australia daily, wood fried grilled to medium rare, served on flat iron ... just awesome!



View attachment 230564 View attachment 230565

Ironically, Outback steakhouse is actually an American Restaurant....

We tried to sue the company for the name, but to no avail...

Outback Steakhouse - Wikipedia, the free encyclopedia