While China finalized negotiations with Australia on
a landmark free trade agreement, after nearly a decade of talks, it is still in
the process of striking similar deals with other countries.
The Sino-Australian FTA could show how similar
agreements would bring long-lasting effects to participating countries. Let's
take a look at which industries in China would be affected.
Dairy industry
According to the FTA, China will levy zero tariffs on
dairy products from Australia in four years' time while the current rate is 10
to 15 percent.
Wang Dingmian, a dairy expert, told 21st Century
Business Herald that the zero-tariff treatment will have "some"
influence on China's domestic dairy industry, but it will not be "very
large" because the volume China imports from Australia is small and the
price of Australian dairy products does not have an advantage over those of New
Zealand, which is the largest source of China's dairy imports.
According to statistics of the General Administration
of Customs of China, the country imported 30,267.82 tons of milk
power from Australia, accounting for just 3.72 percent of all imports.
However, discussion has already begun on whether
zero-tariff treatment will usher in price cuts for imported dairy products or
whether the move will disadvantage China's high-end dairy products makers.
There are also voices that say the move will encourage Chinese companies to
invest in the Australian dairy industry.
China's New Hope Group announced on Nov 18 that the
company will invest A$500 million in Australia's agriculture and food industry,
including the dairy industry.
Wineindustry
China will lower its tariff on imported wine from
Australia year by year and finally levy none in 2019, according to the FTA
between China and Australia.
The country imported $182 million worth of wine from
Australia in the first nine months of this year under the current tariff rate
of 14 to 30 percent, making Australia China's second largest partner country,
according to statistics of the General Administration of Customs of China.
For China's importers, the Sino-Australian FTA has
brought "confidence", according to Guo Haibing, general manager
of Shandong Smart International Consulting Company, which sells
Australian wine.
This may later result in a change in market share of
Australian wine in China, Guo added.