Abstract:Agricultural products from Australia are relatively competitive in international market. The Sino-Australia FTA,which has newly been taken into effect,will deeply affect China’s agricultural products processing sectors. Modifying the standard GTAP model and designing a detailed policy background based on the latest trade data and the official tariff schedule,this paper distinguished the sector of agricultural raw materials and the sector of agricultural products processing from the perspective of industray chain,to support the simulations of how this FTA would influence China in 1 year,3 years and 5 years respectively. The research found that the FTA would benefit China from the macroeconomic perspective,resulting the development of consumption,investment and trade. Most agricultural products processing sectors would benefit while most raw agricultural sectors would lose. Large amount of processed agricultural products would flood in from Australia due to the tarrif cut,which may strike the production and trade in sectors like wool,dairy products and livestock in China. Therefore,China should promote the structural upgrading,release sectoral supporting policies to improve the competitiveness of domestic agricultural processing sectors.