Beyond tariffs – the new risks shaping Australia–China trade |
Ten years on from the China–Australia Free Trade Agreement, tariffs are no longer the main issue. Geopolitical tensions, data governance and rising compliance costs now define the risks shaping economic ties.
Ten years ago, the China–Australia Free Trade Agreement (ChAFTA) was seen as a tariff story: lower duties, more trade, mutual gains. And it delivered. Bilateral trade expanded sharply over the decade. But the uncomfortable truth is that the easy tariff dividends have largely been banked. What now defines the Australia–China economic relationship is not tariffs, but risk – and not a single risk, but what I call a new risk triangle made up of three forces: geopolitical uncertainty, data governance, and compliance costs.
Geopolitical uncertainty
Investment decisions that once looked purely commercial are now filtered through a national security lens. Australia’s 2018 decision to exclude Huawei from the 5G network is an instructive case: it was framed less around narrow technical vulnerabilities than around risk, alignment, and trust in a contested strategic environment.
Since then, this logic has widened – especially in sectors that sit at the intersection of critical supply chains, technologies, and infrastructure. Foreign investment screening is no longer only about competition, jobs, and capital inflows. It is increasingly about whether ownership structures, technology pathways, and supply chains align with allied strategic objectives.
In October 2025, Australia and the United States signed a bilateral framework on critical minerals designed explicitly to strengthen allied supply chains and reduce strategic exposure. In practice, the message to investors is clear: in sensitive areas, as one of my interviewees put it bluntly, “national security now trumps purely commercial considerations.”
For Chinese firms, the uncertainty is structural and multi-directional. The Darwin Port saga illustrates why.........