China is Australia's second-largest 2-way trading partner, closely behind Japan.Also China was Australia's largest import source and second-largest target market. Merchandise exports accounted for 87 % of Australia's total exports to China, and services 13 %.
Import tariffs
Country’s import tariff rates are computed based on the Harmonised System of Classification Codes. There are 2 columns of tariffs according to the Most Favoured Nation Rates and the General Rates. The MFN Rates apply to the countries, which concluded trade agreements or a reciprocal agreement for preferential treatment with China; or are member-states of the WTO (Australia is included in the group).
Import tariff rates also differ according to the type of good, components and the intended use of the goods. The majority of import tariff rates are ad valorem, assessed as a percentage of the CIF value.
Average tariff rates on imported goods have dropped to 9.8 %, with agricultural goods at an average of 15.3 % and industrial goods at an average of 8.95 %. China has also adopted a policy of tariff exemption on some imported equipment and machinery, which encourages scientific research and technology development, and investment in key hi-tech sectors.
Exporters sometimes have difficulties with inconsistent application of customs classifications, tariff rates and import controls by local customs officials.
Non-tariff import barriers
The Chinese authorities divide imported goods into 3 categories:
1) Contraband goods that are prohibited from import (weapons, poisons, and toxic chemicals).
2) Restricted goods, which require an import licence or quota.
3) Permitted goods under which the majority imports are categorised.
China has a wide range of tariff rate quotas that are based on a 2-tiered tariff system. Global access is granted for a special import quota at a low rate, and then excess imports are charged at a higher rate. Given that Chinese tariff rate quotas are placed on a number of sensitive agricultural goods, this creates a non-tariff barrier to trade for a lot of Australian exporters. The following are some of the articles, which operate under tariff rate quotas: raw wool (wool tops); sugar; wheat; cotton; rice; diammonium phosphate; urea imports; NPK compound fertilisers.
Import documentation: commercial invoice; bill of lading (Air waybill); packing list; certificate of origin.
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