There are few more important economic relationships for Australia than the one it has with China. Trade with China now accounts for more than a quarter of Australia’s overall trade, Chinese investment into Australia is growing fast and for many Australian businesses the Chinese market represents an enormous potential growth market. For China, Australia has represented a reliable provider of high-quality inputs from iron ore to education. But as China’s growth model and focus changes, there are big adjustments that will have to be made in the relationship and new opportunities will emerge for both countries.

Capturing the economic potential of the relationship will depend on how both the public and private sectors in Australia and China engage up close and shape the relationship. Getting the most for both counties will require a functional understanding among policymakers, corporate leaders and the broader community of the changes that will shape China in the next ten years.

This is a critical moment in a once-in-a-century economic transition. We have a vital opportunity for both countries to think about how to shape the future course of our relationship in deliberate way, establishing some common reference points rather than simply muddling through.

What are the dynamic forces within China that are driving the new growth model? The joint study will look both back at what has worked in the past and forward to what might yield the best results for the future of the Australia-China relationship after the conclusion of their trade agreement.

Defining the potential of trade and investment relationships, economic cooperation efforts and other interactions, the study will produce a tangible macro and micro-level roadmap of the future relationship. Other outputs from the study will include identifying where the economic relationship is likely to develop, looking at the sectors and activities in which trade and investment ties are likely to concentrate. What are the indicators of success for Australian businesses in China and Chinese businesses in Australia? Which industries will thrive and which will decline under China’s new growth model? For example, the potential exists for Australian businesses to attract investment from China in emerging industries such as biotechnology and healthcare services. The joint study will analyze the predictors of success for both Australian and Chinese businesses.

The kinds of economic interactions and government policies that have underpinned the bilateral relationship thus far are the starting point: whether these are appropriate or sufficient as the economic relationship changes shape and diversifies is the question on which the study will focus. How might economic initiatives already under way benefit both countries? For example, Australia has signed on to the Asian Infrastructure Investment Bank. China has spearheaded this new multilateral lending facility, on the understanding that there is need for massive investment in infrastructure in the region. How can this initiative serve Australian business and national goals?

The study will identify key policy changes in China and Australia that will be necessary to promote a deeper economic partnership, and the impacts that these reforms will have on businesses and citizens. Situating these reforms within the broader context of the Chinese reform agenda (for example, financial liberalization and deregulation) and the economic challenges facing Australia, the report will set forth a detailed agenda for Chinese and Australian policymakers with clear priorities for action.

The study will be led by Emeritus Professor Peter Drysdale at The Australian National University (ANU) and Mr Zhang Xiaoqiang at the China Center for International Economic Exchanges (CCIEE). The study will also marshal broad Chinese and Australian participation from business through the BCA in Australia and from government. CCIEE has budgeted for the study and received top leader-level clearance. The study will engage a team of experts in both China and Australia. The experts will guide and assist in the preparation of the study and its argument. This will require two main meetings, one in Canberra and one in Beijing.

The study will be independently conducted by the East Asian Bureau of Economic Research (EABER) at the ANU and the CCIEE in Beijing. It will take approximately 12 months, with publication by July 2016. The Australian group of experts will include Ian Watt (formerly Secretary PM&C), Gary Banks (ANZSOG and formerly Chair of the Productivity Commission), Allan Gyngell (ANU and formerly Director ONA), Heather Smith, Ross Garnaut and the Reserve Bank of Australia represented by Phil Lowe, along with other experts and input. Apart from Mr Zhang, the names of Chinese experts are likely to include Huang Yiping (PKU); He Fan (CASS, IWEP); Chen Wenling (CCIEE); Fan Gang (NERI); and Zhang Yunling (CASS).