Textiles directly benefit from the China-Australia Free Trade Agreement

“Currently, the tariffs on textiles exported by Chinese companies to Australia range from 10% to 20%. If the tariffs are eliminated within five years, Chinese textile companies will directly benefit from it.” Jiang Hui, president of the China Chamber of Commerce for Import and Export of Textiles, told reporters express.
Recently, the China-Australia Free Trade Agreement has reached an agreement. Australia’s tariffs on all Chinese products will eventually be reduced to zero, and China’s tariffs on most Australian products will also eventually be reduced to zero.
Industry insiders predict that manufacturing industries, such as textiles and clothing, where my country’s long-term exports far exceed imports, will benefit from this.
It is reported that the bilateral trade volume of textiles between China and Australia reached US$5.04 billion last year, of which China’s exports to Australia were US$5 billion, accounting for 99%.
“China’s textile companies can be roughly divided into third-party foreign trade companies and factory companies. Textile factory companies do not need to go through a third-party intermediary to sell products to Australia like third-party foreign trade companies. Therefore, if Australia’s tariffs are reduced in five years, If the tax rate is zero, such enterprises can directly benefit, minus 10% to 20% of tax costs, and they can have more profits and greater competitive advantages.” Jiang Hui told reporters.
After the signing of the agreement, domestic dairy giants Yili and Mengniu have set up operations in Australia. Jiang Hui said that domestic textile companies are unlikely to invest and set up factories in Australia on a large scale, mainly because Australia does not have outstanding advantages in labor costs, consumer markets, etc. .
Data show that last year, the global export volume of my country’s textile and apparel industry reached more than 280 billion U.S. dollars, but the export volume to Australia was only 5 billion U.S. dollars, accounting for about 6% of all exports. Therefore, from the overall situation of the industry, the benefits are limited and will not have a particularly large impact.