Although China is the world’s number one exporter with global shipments valued almost 10 times higher than those for number 21 Australia, that doesn’t mean that Australia is devoid of competitive advantages doing business with its bigger international trade rival.
Sure, China maintains many profitable relationships encompassing a wide range of goods that it ships to its Australian customers due to an abundance of resources and generally lower wage costs. Less well-known is the fact that Australia still enjoys significant trade product strengths that result in counterbalancing positive cashflows from China, albeit from a specific set of resource products.
China Top 10
Chinese Product Advantages Versus Australia
Below are the top 10 goods for which China enjoyed a higher dollar value from its exports to Australia after subtracting what it spent on Australian imports for those same types of products. Technically, a country’s exports minus imports is known as “net exports” which can be a positive amount (indicating a surplus) or a negative number (indicating a deficit).
- Computers, optical readers: US$3.3 billion surplus win for China
- Phone system devices: $1.5 billion
- Miscellaneous furniture: $994 million
- Seats (excluding barber/dentist chairs): $862.6 million
- Women’s clothing (not knit or crochet): $771.7 million
- Lamps, lighting, illuminated signs: $644.9 million
- TV receivers/monitors/projectors: $609.8 million
- Processed petroleum oils: $607 million
- Miscellaneous iron and steel structures: $590.4 million
- Insulated wire/cable: $581 million
Among these, processed petroleum oils (up 981%) and unknitted and non-crocheted women’s clothing (up 56.9%) increased their net revenues for China from export sales to Australia by the highest percentages from 2012 to 2014.
Australia Top 10
Australian Product Advantages Versus China
An essential manufacturing and construction product, iron represent the number one export for which Australia shows the strongest sales advantage compared to similar product exports from China to Australia. In second place is coal, representing a fossil fuel heavily used by Chinese manufacturers.
- Iron ores, concentrates: US$54.3 billion surplus win for Australia
- Coal, solid fuels made from coal: $9 billion
- Refined copper, unwrought alloys: $2.2 billion
- Crude oil: $2.1 billion
- Copper ores, concentrates: $1.8 billion
- Wool (uncarded, uncombed): $1.5 billion
- Barley: $1.1 billion
- Aluminum oxide/hydroxide: $1.1 billion
- Cotton (uncarded, uncombed): $1.1 billion
- Manganese ores, concentrates: $1 billion
The fastest-growing Australian product win versus China is for refined copper up in value by 84.5% during 2014 compared to 2012.
Australia’s edge over China in barley exports moved ahead in value by 80.2% from 2012 to 2014.
The Winner Is
Final Scorecard for Trade War: China Versus Australia
Spearheaded by raw resources including iron, coal and oil, Australia earned an overall $58.5 billion surplus in its international trade with China during 2014.
From a more granular perspective, the Harmonized Tariff Schedule has 97 product categories at the two-digit summary level. China held positive balances in 69 of those 97 categories (71.1%) for a $34.5 billion subtotal, led by the following:
- Machinery: $7.3 billion surplus win for China
- Electronic equipment: $5.7 billion
- Furniture, lighting , signs: $2.9 billion
- Knit or crochet clothing, accessories: $2.1 billion
- Articles of iron or steel: $2 billion
- Clothing (not knit or crochet): $1.9 billion
- Plastics, plastic articles: $1.3 billion
- Vehicles : $953.5 million
- Toys, games: $923.7 million
- Other textiles, worn clothing: $796.3 million
These 10 product categories account for 74.7% of the total value of Chinese product-specific surpluses trading with Australia.
Australia dominated the remaining 28 product categories subtotaling $93.1 billion in surplus, led by the following:
- Ores, slag, ash: $60.3 billion surplus win for Australia
- Mineral fuels including oil: $11.2 billion
- Copper: $3.1 billion
- Cereals: $1.7 billion
- Wool: $1.5 billion
- Meat: $1.1 billion
- Cotton: $1.1 billion
- Raw hides, skins not furskins, leather:$876.3 million
- Inorganic chemicals: $768.9 million
- Nickel: $659.6 million
The above categories represent 88.4% of the total value of Australian product-specific trade surpluses gained at China’s expense.
See also Australia’s Top 10 Exports, Highest Value Australian Export Products, China Major Product Supply Advantages and China’s Top Import Partners
Research Sources:
The World Factbook, Country Profiles, Central Intelligence Agency. Accessed on January 11, 2016
International Trade Centre, Trade Map. Accessed on January 11, 2016
Investopedia, Net Exports Definition. Accessed on January 11, 2016
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