A Study On The Impact Of China-australia FTA On China's Textile Export To Australia

The government of China and Australia conducted kinds of discussions and negotiations 21 times in succession,since China-Australia FTA feasibility of joint research in 2003.In 2015,the two sides finally signed the Free trade agreement between the government of People's Republic of China and the Australian Government in Canberra,bringing the China-Australia marathon of establishing free trade zone to a successful end.The free trade agreement between Australia and China has significantly reduced the import and export tariffs on bilateral trade,which will greatly promote the bilateral economic and trade cooperation and exchanges.As China's exports to Australia's major projects,textiles are expected to be affected by the favorable impact of the FTA and get more vigorous development.For a long time,China's textile industry has a pivotal position in China and even in the world.China is not only the world's largest consumer of textiles,but also the world's largest exporter of textiles.For example China exported more than 1/3 of the world's textile exports to the world in 2015,which is of great significance to China's huge labor force and China's export earnings.However,it was discovered through research on China's textile trade situation that although China's textile exports has increased year by year,and the world textile exports accounted for an increasingly large proportion,yet the export structure is not reasonable.In the textile export,our country still relies on a considerable proportion of raw materials exports;the export industry chain is generally short and low added value.China had a large proportion of finished apparel exports in 1998,but this improvement has not been maintained for a long time.Until today,the proportion of China's textile and garment export products still continue to dip,in 2015 this proportion has dropped to a minimum value since 1995.With the Jiangsu Zhejiang region of China's textile and garment factories escaping outward migration status,near future of China's textile exports will face severe challenges.At present,China actively explores the courage to reform and innovation will find a way out,during a critical period of optimizing the textile export structure.Australia is one of China's most important trading partners,while China is not only Australia's largest export destination but also Australia's largest source of imports.As China's textile market is more concentrated,Australia provides a home for Chinese textiles.With a developed economy and high per capita income,Australia has great potential in textile consumption.The China-Australia FTA gets more close development of bilateral trade,in particular.And at the same time,textile industry can seize the favorable opportunity to expand the Australian market tariff cuts further.This paper studies the impact of China's textile exports in the Australian market,based on the signing and implementation of the China-Australia FTA.After the analysis of the present situation of China's textile trade,this paper makes a theoretical analysis of the feasibility of expanding the Australian market.The theoretical analysis is carried out from two aspects: trade creation and trade diversion effect,gravity model theory.The establishment of a free trade zone will greatly reduce the cost of Chinese textiles into the Australian market,which will create a trade creation effect.Since Australia is an open market,and doesn't impose quotas on imported goods,commodities around the world are gathered to form a fierce competition.The reduction of the cost of textile products in China is conducive to the expansion of the market in Australia,leading to the formation of the extrusion of other countries,and therefore forming a shift in trade flows.The theory of gravity explains how the establishment of the FTA between China and Australia increases the degree of bilateral trade.The gravity model in selecting the scale of national economy,distance and trade openness variables,gets the parameters of every factor affecting the flow of textile trade with the panel data of 18 countries and regions during the period of 1995-2015,and then estimates the China textile export changes.The conclusions obtained in this paper are as follows:The size of the national economy and export trade in import trade openness on China's textile products plays a positive role.With the larger parameter estimation values,it can be inferred that scale of economic and trade openness of a country's textile consumption play a decisive role.And since the textile is harsh to the transport process,the distance factor still constitutes obstacles of textiles for long distance transportation obstacles.The establishment of China-Australia FTA will promote the Chinese's textiles' export to Australia,which is expected to grow about 25%current trade.