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 industrial nations on earth that exports more to China than from China. In fiscal year 2018-2019, China achieved around 32.6% of all Australian exports – that’s around 153.2 billion Australian dollars (116.79 billion US dollars). 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. Last month, Australian news outlets reported that the Chinese embassy there had threatened the Australian government and issued a list of alleged grievances against 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:
barley
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 had 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.
Wine
Penfolds Grange red wines at a special corking clinic in Sydney July 12, 2006.
Greg Wood | AFP | Getty Images
Red meat
According to Australian media, China has suspended imports of six Australian beef suppliers. The most recent ban comes earlier this month. In the first five bans, China has reportedly cited labeling issues and health certification.
Local media also reported this month that Australian lamb exporters said they could not return to the Chinese market under Covid-19 restrictions and that the country’s honey, fruit and pharmaceuticals exports to China were at risk.
cotton
Lumber
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 at a press conference on Nov. 2 following reports of the ban on exporting timber from Queensland.
“China has informed the Australian side of the cases and asked Australian to investigate and take action to prevent recurrence,” he said.
coal
Chinese media reported that the country’s largest economic planner has given power plants permission to import coal with no release restrictions except for Australia, Reuters reported. This followed earlier reports that Beijing verbally notified 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 is Australia’s third largest export after 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.
lobster
Local media reported in November that tons of live lobsters were stranded at Chinese airports and clearing houses, awaiting inspection by Chinese customs officials.
The Australian Seafood Trade Advisory Group said last month the industry has temporarily stopped exporting lobster to China and is working 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 stimulus, analysts at the National Australia Bank are unlikely to see any significant impact on iron ore trade.
“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.
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