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China is Australia's largest trading partner, with total trade in goods valued at $120.2 billion in 2011-12, $76.8 billion of exports and $43.4 billion of imports. Australian goods exports to China have grown a staggering 18.5% since 2011 and include iron ore, coal, crude petroleum and gold.
Australian services exports to China were valued at $5.7 billion in 2011-2012, with education and tourism the major items.
China is Victoria’s largest export market for goods, with over 16% of all Victorian goods exports destined for China. In 2012 Victorian firms exported $3.64 billion worth of goods to China, an increase of over 3% compared to 2011. Major Victorian goods exports to China include wool, hides, milk and cream, live animals and edible products.
China is the largest source market for Victoria’s valuable international education sector and is also a key destination for Victorian urban systems and sustainable development services.
Current and emerging opportunities
China offers massive opportunities for continued exports growth across almost all industry sectors.
Victorian businesses were well represented at the 2010 Shanghai World Expo and are engaging with China in areas including education, tourism, food and wine, urban development, environment and clean energy technologies, nano and biotechnology, clean energy technology, ICT and agribusiness.
The rapidly growing middle class in China continues to provide huge potential for Victorian exports. The goods and services in demand in the Chinese marketplace are well matched to Victorian business strengths, creating export opportunities for Victorian companies in the following areas:
- China is Asia’s second largest food and beverage market by value, and the demand for better quality, premium quality products is increasing;
- China’s ICT market (software, hardware and IT services) is expected to grow at 15 per cent per year for the next five years;
- China is currently Victoria’s largest inbound market in terms of tourism expenditure ($892 million in the year ending March2012). Strong growth of 7.6% per annum in Chinese visitor numbers is predicted to 2020-21, which will see China remain Victoria’s largest visitor market for the next decade (reaching 490,000 visitors by 2020-21);
- China provides Victorian biotechnology and nanotechnology companies with access to one of the fastest growing markets for life sciences and healthcare products;
- China’s urban population is predicted to grow by up to 20 million people per year, generating a multi-billion dollar building program that will require sustainable urbanisation technologies, products and services and urban planning and design services;
- China is fast becoming a leader in the low emissions energy field and the Chinese Government has launched a plan to renovate 25 per cent of buildings in its medium-sized cities by 2020, and 10 per cent in its small cities; and
- China operates the largest education system in the world, enrolling 20 per cent of the world’s students with only two per cent of the world’s education funding. China is the largest source of international students in Victoria with 34,221 Chinese international student enrolments in Victoria, accounting for 30.9 per cent of all enrolments in Victoria in May 2012. Australia-wide the Chinese market represents 29.9% of all student enrolments (May 2012 YTD).
- Furthermore, approximately 85% of students studying offshore with Victorian public VET providers studied in China in 2010.
Tariffs and Taxes
China has a compound import tax system. The General Administration of Customs of China publishes an annual tariff schedule including HS codes, import tariff, import value-added tax (VAT) and import consumption tax rates. Import VAT is levied on almost all products, with most subject to a rate of 13 per cent or 17 per cent.
Import consumption taxes ranging from one per cent to 40 per cent are charged on a number of consumer goods, such as tobacco, liquor, cosmetics, jewellery, automobiles, high-end watches.
Victorian Government support
The Victorian Government Business Offices (VGBOs) in Shanghai, Beijing, Nanjing, Chengdu and Hong Kong provide in-market intelligence and support to Victorian companies looking to do business throughout greater China.