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The Free Trade Agreement (FTA) between China and Australia that was signed in June could greatly benefit Australia’s agriculture sector, feel experts
As a result of the FTA, China’s Beijing Capital Group and Australia’s Yuhu have agreed to a joint venture, which is expected to provide around US$3bn to Australia’s agriculture sector. While the two are yet to make their first purchase as a joint company, they are in negotiations with Australian cattle companies and plans to create a supply chains stretching from Australian cattle stations to Chinese supermarkets, stated local reports in Australia.
Another area that could benefit is dairy. According to Dr. Jeffrey Wilson of the Murdoch University, China has shown great interest in Australia’s dairy products. Last year, Chinese company Ningbo Dairy bought a pair of adjacent farms in the farming hamlet of Kernot in southeastern Victoria. Ningbo combined the two properties and named them Yo You Dairy.
“The Chinese/Australia FTA will increase the interest in Chinese companies to start looking at these Australian companies because the FTA opens up those channels that would allow the companies to sell in the Chinese market,” added Wilson.
The increasing population in China as well as concerns over the safety of Chinese dairy products has paved the way for a thriving market in Australia, said Martine Letts, head of the Australia China Business Council, adding that Australia needs investment and China needs products, making it a win-win situation for both countries.
There have been mixed reactions towards the FTA in Australia, but momentum in favour of the FTA is slowly rising. Recently, Australia-China Relations Institute (ACRI) approved the deal. According to ACRI deputy director Professor James Laurenceson, his agency’s analysis revealed that the agreement “changed little in the way that existing legislation treats overseas workers”. In five years, he said, no one would notice the difference and that no one would be complaining about the agreement.
China’s economy is expected to increase by 44 per cent and Australia could benefit greatly by being part of this growth through the FTA, he added.