BREXIT and the Australia-China Economic Relationship

1 July 2016

James Laurenceson, Deputy Director, Australia-China Relations Institute, University of Technology Sydney

1. In 2015 the value of Australia’s goods and services exports to the UK stood at $8.8bn and $23.5bn to the EU as a whole. This compares with $91.3bn to China.[1]

2. Over the past decade the value of Australia’s goods and services exports to the UK fell by $0.6bn, while they increased by $0.4bn to the EU as a whole. This compares with an increase of $71.1bn to China.[2]

3. In 2015 Australia ran a trade deficit with respect to the UK of $5.6bn and a $42.4bn deficit with the EU as a whole. This compares with a trade surplus of $27.1bn with China.[3]

4. The value of UK investment in Australia has been negative in every year since 2010, averaging (-)$38.4bn in each year. Investment from the EU as a whole has been negative in five of the last six years, averaging (-)30.9bn in each year. This compares with investment from China that has been positive in every year since 2010, averaging $9.3bn in each year.[4]

5. Australia has a Free Trade Agreement with China but not with the UK or the EU as a whole.[5]

6. There are currently 4,902 students from the UK enrolled at Australian educational institutions and 34,329 from the EU as a whole. This compares with 141,507 from China.[6]

7. The UK is Australia’s most important source country for tourists from Europe. Over the past year 663,000 UK tourists have visited spending $5,838 per trip on average. This compares with 1.02 million Chinese tourists spending $8,734.[7] UK tourists are expected to be worth up to $6.7bn for Australia in 2020, up from $3.8bn now.[8] This compares with $13.0bn in 2020 for China, up from $8.3bn.[9]

8. Between 2009 and 2030, the number of people in Europe’s middle class is expected to grow by 16 million. This compares with China’s middle class, which is set to grow by more than 850 million.[10]