Australia’s free trade with China will create jobs and boost the economy as tariffs and investment rules are relaxed, Prime Minister Tony Abbott says.

Mr Abbott and Chinese President Xi Jinping on Monday witnessed the signing by their trade ministers of a declaration of intent to conclude the legalities of the agreement in 2015.

“This will add billions to the economy, create jobs and drive higher living standards for Australians,” Mr Abbott said.

• Read more on the winners and losers of the free trade agreement here.

The agreement will ensure 85 per cent of all Australian exports will enter China tariff-free, rising to 93 per cent within four years and 95 per cent when it is in full force.

China is Australia’s number one trading partner, with the two-way flow of goods and services exceeding $150 billion last year.
Trade between the countries was worth just a quarter of that amount a decade ago.

Mr Xi told parliament his country of 1.3 billion people was a “market of immense potential”, importing more than $US10 trillion in goods over the next five years and investing $500 billion overseas, while its people make over 500 million overseas visits.

Opposition Leader Bill Shorten said Labor welcomed the deal which came out of a decade of negotiations.

“We look forward to examining the detail of the final agreement,” he said.

Australian rice, sugar, wheat and cotton will miss out on benefits, but could be winners when a built-in review is conducted in three years.

Manufacturers, miners and the service sector including finance and tourism industries are expected to make gains.

On entry into force, 92.9 per cent of China’s imports of resources, energy and mining products from Australia will enter duty-free, with most remaining tariffs eliminated within four years.

It will lock in zero tariffs on Australia’s two biggest exports, gold and iron ore, as well as the booming liquefied natural gas industry.

The three per cent tariff on Australia’s third largest export to China, coking coal, will be axed on day one of the agreement.

Chinese televisions, clothes and cars will be cheaper.

Tariffs will be abolished for the $13 billion dairy industry and beef and sheep farmers will benefit from the abolition of tariffs ranging from 12 to 25 per cent.

All tariffs on horticulture will be eliminated.

China will allow greater access for legal, financial, telecommunications, tourism, construction, health, aged care, mining and manufacturing services.

With the agreement required to run the gauntlet of a parliamentary inquiry and the passing of some legislation, the government will need to win over Labor, the Greens or crossbenchers on changes to foreign investment and opening of the labour market.

The Foreign Investment Review Board screening threshold for private Chinese companies investing in “non-sensitive” areas will be raised from $278 million to $1.078 billion.

The government will still be able to meet its election promise of screening agricultural land purchases valued from $15 million and agribusiness purchases from $53 million.

All bids by Chinese state-owned enterprises will be screened regardless of value.

ACTU president Ged Kearney said there was a risk that Australian jobs could be lost as labour mobility between the two countries was made easier.

Australia will provide visas for a range of Chinese contractors and executives for up to four years, and other business visitors for between three and six months.

China will in turn allow certain Australian executives and contractors to stay for up to three years.

Agribusiness Elders says there’s a long way to go before it sees any benefit from the deal.

The FTA should mean higher sales of feeder and slaughter cattle to China, but clarity was needed on the protocols governing live cattle shipments, capacity and sourcing, chief executive Mark Allison said.

“The outlook is more positive – I don’t think there is any doubt of that – but talk is always cheap before the event, and we’ve got a long way to go,” he said.

-AAP