I wish we could all have a forensic examination of the Free Trade Agreement signed between Australia and China.
We’ve been spoon fed little snippets of it, but for the most part we’ve been left to make up the details. The Chinese are shrewd business people and you can’t help but wonder whether Xi Jinping started laughing his head off after getting on the plane.
Andrew Robb and Tony Abbott keep on telling us how much money it’s going to add to the economy. We had the same rhetoric in the past with pretty much every FTA we’ve ever signed, but it’s just about never led to a better bottom line for us and the relevant trading partner.
It is going to be good for certain industries and wine making is one of them. Wine producers around these parts will find it a lot easier to sell their product to the Chinese.
The Canberra Times are reporting this morning on the Inland Trading Co, a local company that exports wine to China. They’ve apparently just signed a single order recently for $2.2 million. That’s a helluva lot of wine. How much of it I wonder.
I was just doing some basic sums on this. Let’s say that they’re selling this wine for $6 a bottle, and I’m assuming that when it comes to this sort of volume of wine, I’m assuming that you don’t sell it already bottled, but just so we can get our heads around how much wine we’re talking….you divide $2.2m by $6 and you get 366,ooo bottles.
That’s crazy. And it’s all out of this region.
It looks as though China is about to become by far and away our biggest wine market.
So many of my radio listeners have raised concerned about the level of Chinese investment in Australia. So how high is it ?
I can tell you in the last year Chinese investment jumped by over 40 % to almost $32 billion, but that only accounts for 1.3% of total foreign investment. Out of this FTA, the threshold for private, non-state-owned, investment from China in non-sensitive sectors to go to the Foreign Investment Review Board will increase from $248 million to $1.08 billion. But, and I think this is most important, the Government will screen investments over $15 million in telecommunications, media and defence industries and in agricultural land, as well as investments in agribusiness over $53 million.
How does it all grab you ?