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More than two-thirds of Australian companies report that their investment interest in China remains steady despite this year’s escalation of US-China tariffs, according to a recent survey conducted by the Australia-China Chamber of Commerce.
Approximately 46% of these firms are likely to boost their investments in China over the next two to three years, while 18% anticipate a decline. The survey, released during the eighth China International Import Expo on November 7, also revealed that 55% expect to maintain or improve profitability this year, even though 72% highlighted the negative effects of tariffs on US-China trade.
The survey, conducted from September 26 to October 15, included 730 companies evenly divided between Chinese and Australian businesses. Nearly 80% of respondents expressed increased confidence in the trade and investment relationship between Australia and China since February—remarkably high considering confidence levels earlier this year.
One anonymous foreign participant stated, “We are focusing on managing costs while remaining prepared to expand if demand picks up.”
Additionally, 61% of Australian firms are adapting their operations or increasing investments in China to capitalize on opportunities as competitors exit the market. Only 4% reported being significantly more inclined to shift production or sourcing outside the country.
In terms of sectors, interest was strongest in agribusiness and food products at 74%, followed by advanced manufacturing at 48%, resource-efficiency technologies at 39%, and education and training at 28%.
A representative of a trade association remarked, “We’re moving from mere complementarity to building joint capabilities by combining technology, talent, and capital to develop solutions that neither country could achieve alone.”
Avocados Australia, for example, is collaborating with agricultural departments in China’s Yunnan and Sichuan provinces to help local growers improve cultivation techniques. Although Australia has not yet gained market access to export avocados to China, Chairman Matthew Kleyn emphasized the enormous potential: “The opportunity for avocados in China is so vast that we are working together to grow consumption. If China increases per capita consumption from 50 grams to one or one and a half kilos—similar to Hong Kong—the global supply wouldn’t be enough.”
When asked about factors shaping their outlook, 58% cited the stabilization of bilateral relations, surpassing tariff concerns. Resilient Chinese domestic demand was mentioned by 46% of respondents.
This optimistic sentiment follows a six-day visit by the Australian Prime Minister to China in July, which resulted in agreements on trade facilitation, green energy cooperation, and tourism.
Chinese investments in Australia remain strong, particularly in clean energy, electric vehicle battery manufacturing, and healthcare—key sectors supporting the net-zero commitments of both countries.
Four Chinese electric vehicle and hybrid models rank among Australia’s top-selling cars.
While confidence has increased, businesses remain pragmatic. No respondents described themselves as “very confident” about China’s short-term economic outlook, citing concerns related to the property market and financial sector.
Regulatory certainty continues to be a concern for 28%, although this is an improvement from 34% in February. Perceptions of Australia’s foreign investment review process have also improved, with 21% reporting positive change after recent reforms, including a new online portal and fee refunds.
The China-Australia Free Trade Agreement, approaching its 10th anniversary next month, received mixed reviews. About two-thirds viewed it positively, but an equal number believed its removal would have limited impact, suggesting that fundamental economic factors drive the relationship more than preferential trade arrangements. Furthermore, 55% of companies expressed interest in digital trade facilitation, and 35% supported mutual recognition of professional qualifications in any future upgrades.
The survey was conducted before recent developments such as the China-US leaders’ meeting in Busan, which announced a framework for reducing certain tariffs.
In the current global landscape, where economic and political influence is distributed across multiple capitals, the importance of investing in key relationships has never been greater, noted Barber.
For Australian companies, the strategic outlook is clear: China’s market size, growth potential, and increasing sophistication justify long-term commitment despite short-term uncertainties.
“Companies are not pulling back; they’re adapting by diversifying supply chains, forming stronger local partnerships, and investing in digital technology to build resilience,” said David Olsson, president and chair of the Australia-China Business Council. “Opportunities remain significant, and as the environment continues to evolve, those who understand geopolitical risks along with traditional commercial considerations will be best positioned for future growth.”
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