China overtook the U.S. as the main source of Australia's imports for the first time in the 12 months to the end of September, official figures showed on Oct. 28. The Australian Bureau of Statistics data showed China, including Hong Kong, accounted for 14.3% of Australian imports, ahead of the U.S. at 13.9%. Chinese imports totaled US$21.8 billion, more than doubling in value over the past four years, while U.S. imports were worth $21.2 billion.
CommSec chief equities economist Craig James said it was a milestone for the Australian economy and meant local companies would face a more competitive atmosphere. "The continued influx of high quality Chinese goods at cheap prices will keep downward pressure on margins for Australian manufacturers and retailers," he said. "The bottom line is that companies will need to get used to super-competitive markets."
The opposition Labor Party's trade spokesman Kevin Rudd said Australia needed to expand its exports to China beyond the commodities sector and into services. "Australia's export profile to China is very much dominated by commodities and raw materials," he said. "While that reflects our comparative advantage, the breadth of China's growth across all sectors has been so great that there are far more opportunities for Australian business than are reflected in our current trade relationship."
Copyright Agence France-Presse, 2005