Trade of agricultural products between China and Australia: tendency and prospects

Trade between China and Australia has been fast expanding in the recent decade and China has now become Australia's second-largest export market In particular, Australia's\ud agricultural exports to China have increased rapidly and have almost trebled over the past decade, reaching A$2.5 billion in 2004. This makes China Australia's third-largest\ud agricultural export market. China's demand for agricultural commodities is expected to continue to rise, driven by the effects of fast economic growth, higher incomes and rapid\ud urbanisation. China's increasing demand for agricultural products presents enormous opportunities for Australian agricultural exports to this growing market. To best capture the emerging opportunities, it is pertinent for Australian agricultural industries to gain an in-depth understanding of the changing patterns of agricultural trade between Australia and China and the driving forces behind such dynamics. In this paper, we investigate the major trends of and changes in the bilateral agricultural trade between Australia and China and examine trade intensity, intra-industry trade and comparative advantages associated with the two countries' agricultural trade. Implications for promoting future agricu1tural trade and cooperation\ud between Australia and China are drawn