According to the Department of Foreign Affairs and Trade (DFAT) China country brief, Australia’s goods and services exports to China totalled $189 billion in 2024–25, representing 29 per cent of Australia’s total global exports. Combined with $120.1 billion in imports from China, the two-way trade relationship stands at $309 billion.
| Metric | Value |
|---|---|
| Australia’s exports to China | $189.0b |
| Australia’s imports from China | $120.1b |
| Two-way trade | $309.0b |
| China’s share of Australia’s total trade | 24% |
| Australia’s trade surplus with China | ~$68.9b |
Source: DFAT, China Country Brief, 2024–25
The trade surplus of roughly $68.9 billion in China’s favour — meaning Australia sells far more to China than it buys — is the defining feature of this relationship. Australia benefits enormously from it on paper. But that surplus is built almost entirely on one commodity: iron ore.
What Australia Exports to China
The composition of Australia’s exports to China tells a straightforward story. Resources dominate. Everything else is secondary.
Based on 2024 calendar year data from DFAT trade records:
| Export Category | Value (A$b) |
|---|---|
| Iron ore and concentrates | $104.8b |
| Liquefied natural gas (LNG) | $20.9b |
| Education-related travel services | $12.7b |
| Coal | $12.5b |
| Crude minerals (incl. lithium concentrates) | $4.6b |
Source: DFAT trade statistics, 2024 calendar year
Iron ore alone accounts for more than 55 per cent of everything Australia exports to China by value. Put differently: more than half the dollar value flowing from Australia to China is a single raw material dug from the Pilbara region of Western Australia and shipped to Chinese steel mills.
Coal at $12.5 billion is worth noting in context. In 2019–20, before China imposed unofficial trade restrictions, coal exports to China were worth approximately $13.7 billion. The figure has broadly recovered — but the journey between those two numbers included a near-total ban, a scramble for alternative markets, and years of price disruption for Australian coal producers.
LNG at $20.9 billion reflects long-term supply contracts, many of which were structured decades ago between Australian producers and Chinese state-owned energy companies. These contracts provide some revenue stability, but they also lock Australia into a customer relationship that is not straightforwardly easy to exit.
The Iron Ore Dependency in Detail
Australia is the world’s largest exporter of iron ore, accounting for more than half of global seaborne supply. China is the world’s largest importer of it, consuming the majority of output to feed its steel industry.
The dependency runs both ways — but not symmetrically. Australia has no alternative customer for iron ore at anywhere near the same scale. China, by contrast, is actively pursuing supply diversification through projects in Guinea, Brazil, and elsewhere. The Simandou project in Guinea — one of the world’s largest untapped iron ore deposits — is advancing toward production, which will eventually add supply to a market where China is already engineering downward price pressure.
The benchmark iron ore price averaged around US$93 per tonne in 2024. It is forecast to fall to US$83 per tonne in 2025 and US$74 per tonne by 2027, according to the Department of Industry, Science and Resources Resources and Energy Quarterly. For every US$10 fall in the price per tonne, Australian export revenue drops by several billion dollars. That is not a theoretical risk — it is the directional forecast.
What Australia Imports from China
The $120.1 billion Australia imports from China in 2024–25 is a fundamentally different kind of trade from what it exports. Australia sends raw materials; China sends manufactured goods.
The top import categories from China include:
| Import Category | Approximate Value |
|---|---|
| Telecommunications equipment and electronics | Largest single category (~$9–10b) |
| Machinery and mechanical equipment | Several billion |
| Passenger motor vehicles (incl. EVs) | $6.2b+ (up from $415m in 2019–20) |
| Electrical equipment | $3.1b+ |
| Clothing, textiles, and footwear | Multiple billions |
| Furniture and homewares | Multiple billions |
Note: Import category breakdowns are approximate, based on ABS International Trade data and DFAT trade tables. Category-level figures for bilateral imports are not published as a single consolidated table.
The motor vehicle figure deserves particular attention. Australian imports of Chinese-made vehicles have risen from $415 million in 2019–20 to more than $6.2 billion — an increase of roughly 1,400 per cent in five years. This has been driven by Chinese brands including BYD, MG, and GWM entering the Australian market with competitively priced vehicles, particularly in the EV segment. This trend is accelerating, not slowing.
China now supplies more than half of Australia’s imports in a wide range of consumer categories including lighting, electronic circuits, containers, steel structures, furniture, mattresses, and toys. According to ASPI analysis of DFAT trade tables, China provides approximately 70–80 per cent of Australia’s imports in several of these categories.
The Trade Balance: A Surplus Built on Fragile Foundations
Australia’s roughly $68.9 billion trade surplus with China looks healthy on a spreadsheet. But the structure of it is the problem. The surplus is not the product of a diversified, competitive Australian economy selling a range of goods and services. It is, overwhelmingly, the product of one region (Western Australia), one industry (iron ore mining), and one commodity (iron ore) sold to one customer (Chinese steel mills).
When that single variable shifts — through price decline, demand reduction, policy change, or supply substitution — the surplus narrows rapidly. This is not speculation; it happened between 2022 and 2024–25, when softening commodity prices contributed to Australia’s overall trade surplus falling from $54.8 billion in 2023–24 to $16.7 billion in 2024–25.
China’s property sector is a central variable. The Chinese construction industry is the primary consumer of Chinese steel, and Chinese steel production is the primary driver of Chinese iron ore demand. New home prices in China fell sharply in 2024, and while the Chinese government has announced support measures, structural overcapacity in the property sector is a long-term headwind. Weaker construction activity in China means lower steel demand, means lower iron ore demand, means lower prices and lower Australian export revenue.
The 2020–21 Trade Restrictions: What Actually Happened
In 2020–21, following diplomatic tensions that included Australia’s call for an independent inquiry into the origins of COVID-19, China imposed trade restrictions on a range of Australian exports. The affected categories included:
- Barley (80.5% tariff)
- Wine (107–212% tariff)
- Beef (various restrictions)
- Timber
- Coal (unofficial import ban)
- Cotton
- Lobster (ongoing restrictions)
- Copper ore
The economic impact was significant in the affected sectors but — critically — did not derail Australia’s overall trade relationship with China. The reason was iron ore. China had no viable alternative source of iron ore at the scale required, so the restrictions were designed to avoid touching the commodity that China needed most. Australia redirected coal to Japan, India, and South Korea; barley found buyers elsewhere; wine exporters took losses but survived.
Only live rock lobsters remain subject to restrictions as of 2026, having not been restored in the broader diplomatic reset that began in 2022.
The lesson is not that Australia escaped unscathed. It is that the restrictions revealed a strategic logic: China will impose pain on sectors where alternatives exist, and avoid disrupting sectors where they don’t. Iron ore is the sector where Australia has — for now — the most leverage. But that leverage is eroding as China pursues supply diversification and reduces its steel-intensive economic model.
The China–Australia Free Trade Agreement (ChAFTA)
The China–Australia Free Trade Agreement (ChAFTA) entered into force on 20 December 2015. It eliminated tariffs on the bulk of Australia’s key export categories, including:
- Iron ore, gold, crude petroleum, and LNG — existing zero tariffs locked in
- Coking coal — 3 per cent tariff eliminated on entry into force
- Thermal coal — 6 per cent tariff eliminated January 2017
- Beef — tariffs of 12–25 per cent eliminated by January 2024
- Wine — tariffs of 14–20 per cent eliminated by January 2019
On full implementation by January 2029, virtually all Australian resources, energy, and manufactured exports will enjoy duty-free entry into China. ChAFTA provides the legal framework — but the 2020–21 restrictions showed that a legal framework does not prevent a trading partner with sufficient market power from finding non-tariff ways to restrict imports when it chooses to.
The Geopolitical Angle in 2026
The Australia–China relationship has stabilised significantly from its 2020–22 nadir. Diplomatic engagement has resumed at the highest levels, trade restrictions have been largely lifted, and both governments have signalled an interest in a functional bilateral relationship.
What has not changed is the structural tension underneath. Australia is a close security ally of the United States. China views US alliance relationships in the Indo-Pacific with suspicion. Australia has committed to the AUKUS submarine program, which is explicitly designed to bolster deterrence capacity in the Indo-Pacific. These are not positions that are going to change, and China understands that.
The current stability in trade is a product of mutual economic interest winning out over strategic friction — for now. Iron ore is the reason that calculation still holds. The question for the next decade is what happens as that leverage weakens.
For a broader view of how Australia’s trade relationships fit together, the full overview of Australia’s top trading partners covers all major partners in a single data table.
Dependency Risk: What Happens If This Relationship Breaks Down
This is the question worth asking directly.
A full breakdown of the Australia–China trade relationship — the kind that would result from major military conflict or extreme diplomatic rupture — would be economically catastrophic in the short term. The federal budget is significantly dependent on iron ore royalties and company tax from mining companies whose earnings are tied to Chinese demand. Western Australian state revenues are similarly exposed.
A partial breakdown — more like the 2020–21 episode — would be damaging in specific sectors, manageable at the aggregate level if iron ore remained untouched, and would accelerate the diversification strategy Australia has been attempting through deeper trade ties with India, South Korea, Japan, ASEAN, and the United Kingdom.
The dependency is real, well understood by government, and the subject of active — if slow — strategic repositioning. What the data makes clear is that it cannot be unwound quickly, because it is not the product of policy choices alone. It is the product of geography, geology, and the structural requirements of a rapidly industrialising China.
FAQ
How much does Australia trade with China?
In 2024–25, Australia’s total two-way trade with China was $309 billion, according to DFAT’s China country brief. This made China Australia’s largest trading partner, accounting for 24 per cent of Australia’s total goods and services trade with the world.
What does Australia export to China the most?
Iron ore is by far Australia’s largest export to China, valued at $104.8 billion in 2024 (calendar year). It accounts for more than 55 per cent of all goods exports to China. LNG ($20.9 billion), education-related travel services ($12.7 billion), and coal ($12.5 billion) are the next largest categories.
What does Australia import from China?
Australia imports primarily manufactured goods from China. The largest categories include telecommunications equipment and electronics, machinery, passenger motor vehicles (including EVs), electrical equipment, clothing, furniture, and consumer goods. Total imports from China in 2024–25 were $120.1 billion.
Does Australia have a trade surplus or deficit with China?
Australia runs a large trade surplus with China — meaning it exports significantly more than it imports. The surplus in 2024–25 was approximately $68.9 billion. This surplus is driven almost entirely by iron ore exports.
What were China’s trade restrictions on Australia?
Between 2020 and 2023, China imposed tariffs and informal bans on a range of Australian exports including barley, wine, beef, timber, coal, cotton, and lobster. Most restrictions were removed as part of a diplomatic reset that began in late 2022. As of 2026, only live rock lobsters remain subject to ongoing restrictions.
Is the Australia–China trade relationship at risk in 2026?
The relationship has stabilised diplomatically since its 2020–22 low point. The key economic risks in 2026 are structural: falling iron ore prices, China’s weakening property sector reducing steel and therefore iron ore demand, and China’s active strategy to diversify its iron ore supply away from Australian dependence over the coming decade.
Conclusion
Australia’s trade relationship with China in 2026 is simultaneously the country’s greatest economic asset and its most concentrated vulnerability. The $309 billion two-way trade figure and the $68.9 billion surplus look strong — but they rest on iron ore, a single commodity whose price is declining, whose dominant buyer is engineering supply alternatives, and whose market is tied to a Chinese construction sector facing structural headwinds. Diversification is the correct strategic response. The data shows it is not happening fast enough to offset the risk within this decade.
This article is for informational purposes only and does not constitute financial, legal, or migration advice. Data is sourced from publicly available Australian government sources and is accurate at time of publication. Please consult a registered professional for advice specific to your situation.
