Australia's China Fta Strategy Analysis

Australia is vast in territory and rich in natural resources, which playsspecial roles in geopolitic and economic aspects in Asia-Pacific.Australia follows America in political security while relys on economyand trade links between Asian countrys to promote the economicaldevelopment. The pillar of the economy in Austrilia is exporting such rawmaterials as agricultural products and minerals. The rapid developmentin China needs a good deal of raw materials badly to meet itsdemands. Thus, there is tighter complementarity in resourceadvantages and economic structure between Astrilia and China. Theeconomic and trade relationship between them has been rapiddevelopment. Recently, Australia is the China’s ninth largest tradepartner and China is the Australian biggest trading partner. In order todeepen the economic relations and promote the commercialintercourse, since the two countrys accomplished the feasibility study inestablish the free-trade zone in2005, the first round negotiation ofAustralia-Sino FTA was held in April,2005and the negotiation has beenheld15rounds in all end by July,2010. The Australia-Sino FTA wentthrough rough–on the one hand, there is a striking difference of theinterests demand in Australian-Sino FTA due to the different nationalconditions; on the other hand, the change of external conditions ofpolitics and economics also leads to the dilemma. It is significant bothfor Australia and China to reach the Australian-Sino FTA, especially forthe middle power such as Australia in the aspect of politics andeconomics. Therefore, Australia should adopt the correspondingstrategies based on its own conditions to push forward the course of theAustralian-Sino FTA and realize the national interest.The paper will analyse in following five parts: the first part elaboratesthe concept of free trade agreement (FTA), its legal basis, and the history of its development, it emphasises on analyzing the economicand political effect of FTA. The second part is beginning withexpounding the rise of Australian FTA from the angle of history, thenanalyzes the objective of Australian FTA form the reason of pushingforward the multilateral trades negotiation and realizing the politicalaspiration of middle power. It draws forth the Australian-Sino FTAthrough introducing the current situation of Australian FTA. The third partorganizes the development history of the two countries from the aspectof power-making. It analyses the Australian-Sino bilateral trade structurecomplementarity by adopting the Trade Intensity Index (TI). Itsummarizes the negotiation course and characteristics ofAustralian-Sino FTA to realize that the dilemma of Australian-Sino FTA ismainly in such fields as agriculture, mineral energy, and service. It alsoanalyses the reason of dilemma from the political and economicaspact. The fourth part emphasizes on analyzing the strategies howAustralia pushes forward the Australian-Sino FTA negotiation. Australiashould make use of the abundant resource superiority and activepolitical diplomacy to make China come to terms. It also suggestAustralia to take advantage of Trans-Pacific Strategic EconomicPartnership, U.S.-Australian Alliance, and Astralian-Japan Alliance,which have the negative effect in political security in China, to threatenChina to compromise. The fifth part comments on the strategies andproposes the Chinese coping strategies.