China is Australia’s largest export destination, with $95 billion of goods and $7 billion in services provided to the Chinese market in 2013.
China is the largest importer of Australian agricultural produce. Australia’s export relationship with China was worth $9 billion to the agricultural sector in 2013-14.
The ChAFTA is expected to have unprecedented benefits for Australian exporters, with claims that the agreement will bring ‘billions’ to the economy and ‘drive higher living standards for Australians’ made by the Prime Minister late last year.
ChAFTA will be subject to an ongoing review process, with the first required within three years, which is expected to prompt further liberalisation of trade with China.
ChAFTA includes a ‘Most favoured nation clause’, in respect of certain investment and services commitments, meaning that if agreements on more beneficial terms are subsequently offered by China to another country, those terms will apply to Australia as well. However, this clause does not apply to tariff levels.
For detailed FTA information, please visit: http://dfat.gov.au/trade/agreements/chafta/Pages/australia-china-fta.aspx
Date in force
- To be determined. Tariff rate information provided on the basis that agreement will commence in 2015.
More than 85 per cent of goods exported to China will be duty free upon entry into force; this figure will reach 93 per cent in four years’ time. At full implementation, 95 per cent of goods exported to China under ChAFTA will be tariff free.
Resources and energy is another key component of ChAFTA; Australia exported over $90billion of such products in 2013-2014. 92.9% of these products will be duty free from entry into force, and most remaining tariffs are to be removed within four years. On full implementation of the agreement, 99.9% of these exports will enter into China duty free.
Below you will find a way to look up the tariffs associated with a SELECTION of popular Australian exports. PLEASE NOTE: this is not a tariff calculator OR an exhaustive list. We recommend obtaining professional advice for products not listed here.
Look up individual benefits
To see the tariff associated with an industry/product click here to be redirected
Financial service providers, such as banks, insurers and securities firms will have greater access to the Chinese market. Under ChAFTA financial service providers will be able to establish joint venture futures companies, up to 49% of which may be Australian owned, and Australian insurance providers will have liberalised access to China’s statutory third party liability motor vehicle insurance market.
Tourism service providers are able to invest in the construction and operation of hotels and restaurants in China.
Healthcare providers may establish and operate wholly owned hospitals and aged care facilities in China.
Law firms have guaranteed access in the Shanghai Free Trade Zone, as they are now able to establish “commercial associations” offering Australian, Chinese and international legal services.
Australian Telecommunications providers are able to provide certain services in the Shanghai Free Trade Zone.
China will list 77 private higher education institutions on a Ministry of Education website, giving these providers a greater profile with prospective Chinese students.
Certificate of Origin
In order to obtain benefits under ChAFTA, Australian exporters will have to meet origin requirements. Exporters wishing to claim preferential treatment under the ChAFTA must provide either a certificate of origin or declaration of origin. However, in order to reply on a declaration of origin, the Customs authority of the importing country must have issued an advanced origin ruling in respect of the relevant good. For Australian exporters, this means either using a certificate of origin, or obtaining an origin ruling from Chinese Customs.
Goods will have Australian origin if:
- They were wholly obtained in Australia;
- They were produced entirely in Australia, exclusively from Australian materials; or
- They were manufactured in Australia or China, using materials from other sources, and meeting ChAFTA’s product – specific rules.
- Non-originating materials must have undergone “substantial transformation”.
Doing business with China
There are many things to consider before embarking upon an export journey. Doing business in China presents some unique challenges, but there are a number of key areas to consider before doing any international business.
The areas to consider are:
Business activities and risks
- Legal Structure
- Direct tax
- Repatriation of profits
- Transfer pricing
- Withholding tax
- Indirect tax
For a full checklist that will put you on the right path to doing business in China, click HERE.