Anthony Albanese backs ‘opportunity for growth’ in trade and economic ties with China

Prime Minister Anthony Albanese has rejected suggestions Australia’s exports to China had ‘peaked’.

Prime Minister Anthony Albanese walks the Bund waterfront in Shanghai. Picture: NewsWire/Joseph Olbrycht-Palmer

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Anthony Albanese says there is still “opportunity for growth” in trade and economic ties with China, despite trade data showing Australia’s exports to China have tumbled since his last trip to Shanghai.

The Prime Minister on Sunday rejected suggestions Australia’s exports to China had “peaked”.

”No, I think there’s an opportunity for growth,” Mr Albanese said in Shanghai in the corporate headquarters of China’s giant online travel agency Trip.com.

“The economic relationship and trade is something we no doubt will have discussions of while I am here.

“There’s a range of products – for example, beef exports have increased considerably,” he added.

As he flew into Shanghai in Nov­ember 2023, Australia’s trade with China was on track to set a new record, giving a favourable backdrop to the trip, which celebrated the end of much of Beijing’s $20bn blacklisting of Australian goods and lobbied for an end to the remaining blockages on lobster, wine and beef.

Prime Minister Anthony Albanese and Trip.com CEO Jane Sun watch Tourism Australia’s Executive General Manager International Markets, Commercial and Business Events Robin Mack and Vice President of Trip.com Edison Chen during a visit to Trip.com in Shanghai, China. Picture: Joseph Olbrycht-Palmer/NewsWire

The numbers are less sunny this time. Despite the Albanese government’s diplomatic trade successes in the first five months of the year, Australia’s exports were 16 per cent below 2023, falling from $83.2bn to $69.6bn, according to analysis by The Australian of Department of Foreign Affairs and Trade statistics.

The biggest fall was in lithium exports, which have plunged more than 80 per cent from $7.8bn in the first five months of 2023 to just $1.7bn as China diversified its sources of supply.

Australia’s most important export, iron ore, fell 10 per cent during the period from $46.1bn to $41.4bn as China’s property turmoil continued.

Those falls in two of Australia’s biggest exports have far exceeded gains from relatively minor items removed from China’s blacklist, such as wine and lobster, which were key priorities on the Prime Minister’s last trip.

Australian wine exports to China were worth less than $1bn in 2024, while the renewed lobster trade is worth less than $500m.

Even Australia’s total agricultural exports to China fell by 4 per cent in the period from $7.4bn to $7.1bn, despite gains in some categories such as beef, which has benefited from Chinese restrictions on American beef.

Australia achieved its record exports to China in 2023 with $204.4bn, but that fell by 12 per cent in 2024, coming down to $179.2bn.

Some analysts have raised the possibility that Australia’s economic complementarity with China has now passed its “peak”.

However, even at its reduced level China remains by far Australia’s biggest export market worth as much as our next five biggest markets combined: Japan, South Korea, India, the US and Taiwan.

On Sunday, the Prime Minister focused on one Australian export to China that continues to surge: tourism.

Last year, more than 860,000 Chinese tourists visited Australia, second by numbers only to New Zealanders who came over.

Chinese tourists, many of whom are visiting children studying at Australian universities, stay much longer than other visitors.

Partly for this reason, they are also Australia’s biggest-spending tourists.

“As we see the increase in the middle class in China, increasingly this is a market that will be of massive benefit for Australia,” the Prime Minister said at a signing ceremony with Trip.com chief executive Jane Sun, one China’s most senior female business figures.

“Last year alone, Chinese tourists spent more than $9bn in Australia,” he said.

“That’s jobs for Australians, particularly those in regional ­communities.”

While Chinese tourists have been the fastest growing segment in Australia – jumping by 26 per cent last year – they remain at about 60 per cent of their peak of 1.4 million in 2019.

That drop-off is not unique to Australia. Markets around the world have found Chinese tourists continue to visit in greatly reduced numbers after the pandemic, partly because of a hit to their spending power as China’s property market continues to suffer.

The return of Chinese tourists in Australia, however, has been stronger than it has been in ­Europe and the US.

Tourism Australia on Sunday released a trailer of a new $130m campaign it hopes will lure tourists from key markets, including China, Japan, India, Singapore and Malaysia.

The Chinese leg of the promotion – the second chapter of the Australian tourism promotion group’s “Come and Say G’Day” campaign – features Yu Shi, a ­Chinese mainland award-winning actor.