Resources boom fuels record trade with China

This, in turn, produced a record overall trade surplus of $16.8bn, compared with a trade deficit of $4bn in 2009.

The trade details for 2010, which the Department of Foreign Affairs and Trade released yesterday, underline the massive role played by the resources sector.

The enormous China total resulted from growth in imports and exports combined of 23.6 per cent, even as the industrialised world struggled to recover from the global financial crisis.

A third of the exports to China comprised iron ore and concentrates, worth $35bn, with the next biggest products comprising coal at $5bn and other ores at $2bn.

The country's biggest imports from China were $4bn for computers and $3.9bn in telecommunications equipment.

Japan remained the second largest overall trading partner, with total trade at $66bn, and the USA was third at $50bn, while South Korea was the third-biggest export market, with $22bn sales there.

Most of Australia's exports -- 52.4 per cent -- went to East Asia last year, and 72 per cent to the Asia-Pacific Economic Co-operation forum countries, with just 18.3 per cent going to the 27 countries that make up the European Union.

Exports were dominated by resources. Iron ore and concentrates shot up 64 per cent in value from 2009, to $49bn, pipping coal sales, which reached $43bn.

Next, a long way below, came education-related travel services, at $18bn, just ahead of gold, which at $15bn fell 3.8 per cent.

The top eight merchandise exports were all resources, followed by beef and wheat rounding up the top 10. Australia's biggest imports were travel -- excluding education -- which cost $20bn, crude petroleum $16bn, and cars $16bn.

Overall, Australia's exports rose by 13.9 per cent last year to $284.6bn, while imports rose considerably less, by 5.4 per cent to $267.8bn.

In the five years since 2005, export values have increased by an average 9.1 per cent a year, almost triple the 3.5 per cent average rate of increase of export volumes.

Import values have risen over the same five years by an average of 6.2 per cent.

The terms of trade -- the ratio of the prices Australia receives for its exports to the prices for its imports -- rose by 16.5 per cent.

While manufactured exports rose by 4.5 per cent last year, primary products including mineral and energy exports rose by 24.1 per cent on the back of extraordinarily strong prices.

However, exports of services -- the sector that comprises about 70 per cent of the Australian economy -- fell 0.5 per cent last year.

The Australian Bureau of Agricultural and Resource Economics forecasts that this export growth path will continue into next year, with mineral sales up 19.9 per cent in the next financial year to June 30, 2012, and rural exports up 6.3 per cent.