Trade Between Australia and China - 2020 Words

Many products we use today are made in China. Trade between Australia and China has heightened in the last couple of years. China has one of the world’s largest economies. It has an increasing role in shaping the world economy, accounting for a third of the increase in the world’s gross domestic product and imports for the period 2000 to 2003 (The Economist 2004). It is also home to a population of 1.3 billion inhabitants, consuming a variety of goods from food items to luxury commodities, toys, clothing, gifts, most car parts and many more things Australia benefits from. For non-agricultural goods, Australian import tariffs are generally low. The most notable exceptions are on motor vehicles and textiles, clothing and footwear imports.†¦show more content†¦Labour costs are lower, and more importantly, labour is largely subservient. In contrast, China’s merchandise exports to Australia are mainly labour intensive manufactures, with the major categories being textile, clothing and footwear products, as well as machinery and electronics. Together these items amounted to $4 billion in 2003, around 70 per cent of China’s exports to Australia. China’s gross domestic product has been growing annually at 7 per cent on average over the past five years, reaching $6.4 trillion (in purchasing power parity index) in 2003 ( Anderson K., 1995). China’s integration into the world economy through trade was one of the key drivers of this strong economic growth. China has adopted measures to transform its economy from a centrally planned system to a more market oriented one. These measures included the opening of China’s economy to world trade. Many of the Australian companies such as Black Decker, makes many of its power tools and locks in a factory it owns in Suzhou, outside Shanghai, and a separate 50/50 joint venture plant in Shenzhen, southern Chinas manufacturing boomtown. Ford Motor also planned to buy up to $3 billion worth of auto parts from Chinese suppliers. Wal-Mart also spends more than $18 billion annually on products made in China (D. Uren, The Australian News, 2008). According to Baier, S.L. and Bergstrand, Chinese motorcycle manufacturers dont make hugeShow MoreRelatedEssay about Trade Between Australia And China1888 Words   |  8 PagesMany products we use today are made in China. Trade between Australia and China has heightened in the last couple of years. China has one of the world’s largest economies. It has an increasing role in shaping the world economy, accounting for a third of the increase in the world’s gross domestic product and imports for the period 2000 to 2003 (The Economist 2004). 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