A free-trade agreement between China and Australia will be in place before the end of the year after the Australian opposition dropped its objections to the plan following lengthy negotiations.
The deal will now be approved by the Australian Parliament with the support of the centre-left Labor Party, whose misgivings had held up its passage through the legislature.
But a Hong Kong-based economics expert said the pact may not have much effect on either economy, adding that China was trying to strike many deals in the region to counter the US-led Trans-Pacific Partnership.
Australian Prime Minister Malcolm Turnbull said it was a “great day for Australia”, adding the deal was critical for Australian jobs.
“We will benefit from China in a way that even the architect of the deal [trade minister Andrew Robb couldn’t have imagined,” he said on Facebook. “This is going to be a very big step for Australia.”
Up to 93 per cent of Australian exports to China will eventually be tariff free under the agreement, while up to 5,000 additional visas a year will be issued for Chinese workers and tourists.
The Australian Stock Exchange surged on the news, closing 12.7 points higher, or 0.2 per cent, after being down for the majority of the day.
But Professor Li Kui-wai, of City University’s department of economics and finance, said the deal might have little effect and was mainly “cash diplomacy”.
“It’s more or less a diplomatic experience just to please both sides and the content, there will be some essence, but it will be pretty superficial,” he said.
Li said China was working on a large number of free-trade deals in response to the TPP.
“It’s more of a diplomatic show,” he said.
The news of the Australian deal came just four months after the Chinese government signed an agreement with South Korea, following three years of negotiations.
The deal between China and Australia was originally struck in November 2014 but had been held up by opposition parties over concerns around its effect on local jobs.
John Brumby, the national president of the Australia China Business Council, enthusiastically welcomed the announcement yesterday, saying it would be good for the country.
“[The agreement] is overwhelmingly positive for Australia, delivering a platform to take our economic relationship to a new level and providing our businesses with immense competitive advantage in the large and rapidly growing China market,” he said.