With the Free Trade Agreement, China would increase its investment in Australia by establishing more permanent business establishments thereby providing increased employment opportunities and fuller utilisation of resources. With more employment opportunities, the per capita income of Australians would increase along with new and additional supply options available. This would overall help improve the standard of living of the people in Australia.
Further, on account of cheap imports for Australia, the savings would get channelized to effective and efficient industries or might be invested to develop some new markets; developing economic gains and creating additional employment opportunities.
The most important benefit that China would get from Free Trade Agreement is access to the rich mineral resource base of Australia. Any economic development is dependent on the key resource inputs to meet the requirements and demands for final products. Free Trade Agreement with Australia would suffice the need and access of China to the resources. Thus, Australia’s rich resource base would assist in China in expanding its production and base in Australia.
China has been expanding at a rapid rate gaining immensely from its knowledge, process and expertise. Thus, China has a unique opportunity to take advantage and expand using Australian knowledge. Thus, Free Trade Agreement should help China’s rapid expansion by sharing and utilising Australian expertise to improvise on opportunities and infrastructure to handle China’s rapid expansion.
The removal of trade barriers by Free Trade Agreement would also allow re-distributes the resources and various means of production in China to their most effective use. With Free Trade Agreement, money as well as employment opportunities will also be freely available across borders(Adams, P., Fan, M., Li, R., & Zheng`, Z., 2005). Industries would shift their set-up from countries having high cost of production to countries with low production cost.