A general view of an Australian flag is seen outside the Great Hall of the People on April 9, 2013 in Beijing, China.
Feng Li | Getty Images
SINGAPORE – China is Australia’s largest trading partner and a top export destination.
Australia is one of the few industrialized nations on earth that exports more to China than it imports from China. In the 2018-2019 fiscal year, China added roughly 32.6% of all Australian exports – that’s roughly A $ 153.2 billion (US $ 116.79 billion). By far the largest export was iron ore.
Relations between the two countries have worsened since Australia backed a call for an international investigation into China’s handling of the coronavirus, first reported in the Chinese city of Wuhan. Australian news outlets last month reported that the Chinese embassy there threatened and surrendered the Australian government a list of the alleged complaints towards Canberra.
China has taken various measures this year hindering Australian imports, from imposing tariffs to imposing bans and restrictions. Here is a look at the affected Australian export sectors:
In May, Beijing proposed anti-dumping and anti-subsidy tariffs of 80.5% on Australian barley – a move that effectively excluded Australian barley producers from the Chinese market. The Chinese Ministry of Commerce claimed an investigation that began in 2018 confirmed that Australia dumped barley, which allegedly caused significant damage to China’s domestic industry. Reuters reported.
Australian government officials have denied the allegations, saying the country’s farmers are some of the least subsidized among OECD countries. Canberra has also asked the World Trade Organization to mediate in the dispute. Experts believe that this dispute will take some time to resolve.
Penfolds Grange red wines at a special corking clinic in Sydney July 12, 2006.
Greg Wood | AFP | Getty Images
China has suspended imports of six Australian beef suppliers. The most recent ban comes earlier this month to Australian media. In the first five bans, China has reportedly cited labeling issues and health certification.
Local media also reported This month, Australian lamb exporters said they would not be able to return to the Chinese market under Covid-19 restrictions, and exports of honey, fruits and pharmaceuticals to China were at risk.
China has banned timber imports from the Australian states of Queensland, Victoria and more recently from South Australia and Tasmania.
“Chinese customs have detected many cases of live pests in wood imported from Australia since January, such as longicorn and buprestid beetles. These live pests, if allowed into China, will seriously endanger China’s forest production and environmental safety,” the spokesman said of the Chinese Foreign Ministry Wang Wenbin said in a press conference on November 2nd following reports of a ban on the export of logs from Queensland.
“China has informed the Australian side of the cases and asked Australian to investigate and take action to prevent recurrence,” he said.
Chinese media have stated that the country’s top economic planner has given power plants permission to import coal with no release restrictions, with the exception of Australia. Reuters reported. That followed previous reports Beijing verbally requested state utilities and steel mills to stop importing Australian coal.
A Hazelwood Coal Power Station coal mine stands in Hazelwood, Australia on Thursday March 30, 2017.
Carla Gottgens | Bloomberg | Getty Images
Coal belongs to Australia third largest export to China. However, according to analysts, the share of coal exports to China has declined over the years as Australian exporters found additional buyers in countries like South Korea, Vietnam and Japan.
Local media reports in November These tons of live lobsters were said to have been stranded at Chinese airports and clearing houses, waiting to be inspected by Chinese customs officials.
Australia’s Seafood Trade Advisory Group said last month The industry temporarily stopped exporting lobsters to China and worked with Chinese and Australian authorities to respond to Beijing’s new border control protocols. The group said it also plans to find other destinations for lobsters, including Australia’s domestic market.
Iron ore, education, tourism
Despite export restrictions and taxes on the above sectors, the Australian economy remained relatively unaffected by Beijing’s measures. This is likely because China has not yet imposed any restrictions on Australia’s largest export to the country: iron ore. Prices have risen to record levels in the past few weeks.
Given China’s reliance on Australian iron ore at sea and increased appetite from aggressive industrial incentives, iron ore trade is unlikely to be significantly affected, according to analysts at National Australia Bank.
“Almost half of all Australian exports to China are iron ore. Tariffs or other restrictions make up a small part of total GDP, but will have important sector and regional implications,” the analysts said in a December 14 release.
However, they warned that if Beijing’s attitude towards them changes once the borders are reopened, the Australian education and tourism industries, which rely on Chinese students and tourists, could be affected.