The Australian industries set to gain from China’s surging imports

The constant changes in US trade policies and tariffs often distort the fact that the US is not the only major global trade player. Australia’s biggest trading partner is actually China and that relationship too has been coloured by tension in recent years.

Have we so quickly forgotten the sudden glut of cheap lobster on the market when China placed a four-year ban on Australian rock-lobster imports (lifted towards the end of 2024) or heavy sales on premium Australian wines after the implementation of heavy tariffs?

A temporary boon for the Australian consumer, not so great on the business front at the time. History overshadowed by the more recent excitement of unpredictable tweet-based tariff changes.

Where this all becomes more interesting to today’s investor is the news that China’s exports and imports are surging. In October, exports jumped 35.2% year on year in US dollar terms, while imports jumped 41.6% – though the outcome leaves China in a global trade surplus, the news of a jump in imports is highly relevant to Australia – based on 2025, Australia has a trade surplus with China rather than the other way around.

After all, the Chinese trade relationship was valued at $326 billion in 2025 and last year alone, exports to China represented 29% of our global goods and services exports.

The trade relationship between China and Australia

Australia’s trade relationship with China is covered by the China-Australia Free Trade Agreement (ChAFTA), which entered into force in December 2015. Separately, the wider relationship has been affected by security decisions, including Australia’s exclusion of Huawei from its 5G network in 2018. The agreement has been undergoing review since 2025, and Australia and China also are parties to the Regional Comprehensive Economic Partnership Agreement (RCEP).

Given unpredictability across the globe, Australia actually has many trade agreements and has made strides to further diversify to reduce dependence on one or two major economies. The Australian Government has concluded negotiations on a free trade agreement with the European Union, which is not yet in force. Negotiations with the Gulf Cooperation Council remain paused, while Australia and India are negotiating a broader Comprehensive Economic Cooperation Agreement. Even noting this, China continues to be significant for Australia.

The table below shows Australia’s leading goods and services exports to China. In 2025, Australia was China’s fifth-largest source of merchandise imports.

Surging imports and Australia

Much of the surge in exports and imports for China is related to AI, particularly semiconductor demand and materials to build these. Imports have focused on commodities and raw materials to support manufacturing for the export market in technology and AI.

Across January-September 2026, there has been a 40.6% increase in the value of exports to China from Australia, valued at US$135.4bn – our own imports from China have risen 22% to US$65.9bn in that same period.

Some particular import jumps relevant to Australia include:

• Gold (reserves rose 25.8 metric tonnes in October; it has been buying for 24 consecutive months)
• Iron ore (rose 3.1% year on year in July and continued to rise in August)
• Coal
• Wine and agriculture (removal of the anti-dumping tariffs)
• LNG

Overall, the year-on-year increase in imports from Australia is largely attributed to gold (August: 616%), other minerals (August: 449%) and Coal, briquettes and similar manufactured solid fuels (August: 80.4%).

AI and digital infrastructure continue to be significant global themes, even with concerns over AI valuations, and form part of many nations’ plans and budgets. It is also a significant focus area in China’s 15^th five-year plan meaning ongoing government investment and policy direction.

Chinese demand for Australian education has faced challenges in recent years, with changes in visa settings, economic slowdown in China, political discourse over immigration, along with concerns over whether there was sufficient structural support for students to thrive and learn.

It should not be discounted as another ongoing important Australian export to China. While there has been some softening in 2026, it is worth remembering that education-related travel spending had jumped 31% between 2024 and 2025.

What this means for investors

If there’s nothing else investors have learnt in recent years off the back of various trade wars, it’s that investing off an assumption of continued positive trade agreements can be dicey.

However, the general wisdom when investing in relation to China is to consider where its policy focus areas are and where it might rely on Australia for fulfilling its demands. Changes in policy in the past that have hit Australian industries in a negative way have tended to be in areas where China is less reliant on using Australian exports.

Australian resources and energy have traditionally been top beneficiaries of the relationship with China. Iron ore has been prominent in the media because of pricing methodology disputes where the Chinese minerals buying agency has sought to reduce costs and diversify its sources of supply. This is said to have hurt volumes for companies like Fortescue, BHP and Rio Tinto.

Taking this into account, along with noting that China is targeting to reduce its use of coal, these are key companies with significant exposure to China. These companies are not a recommendation but rather a general list to assist with research.

• Woodside (ASX: WDS) – generates around 56.5% of its total revenue from the Asia-Pacific region, though it doesn’t outline exact figures from China.
• BHP (ASX: BHP) – exports coal, iron ore and copper to China. China accounted for roughly 60% of BHP’s sales in FY25.
• Rio Tinto (ASX: RIO) – primarily exports iron ore but is expanding exports of copper, aluminium and lithium. It has a partnership with China with regard to green steel. China is responsible for around 60% of Rio Tinto’s revenue.
• Fortescue (ASX: FMG) – sells 89% of its iron ore to China.
• Newmont Corporation (ASX: NEM) – the world’s largest gold producer sells into many markets, including China.
• Northern Star Resources (ASX: NST) – maintains an office in Beijing to support copper and gold commercial relationships.
• Evolution Mining (ASX: EVN) – has partnered with Chinese firms in the past as part of its operations.
• IDP Education (ASX: IEL) – has operations within China through testing and placement services. 
• ALS Limited (ASX: ALQ) – the global geoscience and minerals testing and laboratory services company reduced its Chinese operations in recent years though still has a presence in Shanghai focused on mining operations.

Outside this, some consumer-based companies have significant exposure to Chinese revenue, including Bubs Australia (ASX: BUB), Treasury Wine Estates (ASX: TWE) and the a2 Milk Company (ASX: A2M) though these have each experienced disruption to sales at various points in recent years depending on regulatory changes and changes to tariffs.

Final lessons

China is a major economic power and exposure to this can be a benefit to a portfolio but investors should remember the importance of diversification across regions and revenue streams.

Many companies heavily exposed to China are in the resources sector and the ASX 200. Australian investors may therefore already have significant exposure. A portfolio review should consider that existing exposure and what it means for overall portfolio risk.

At a point where the US and the Magnificent Seven are a main focus, it’s helpful to consider some of the other dominant themes affecting the Australian portfolio and activities in China have a major influence too.