Canberra has advised Australian companies to seek new export markets and reduce their reliance on China as a worsening dispute threatens to trade up to A $ 6 billion a year.
Government officials released the exporters during a conference Thursday to discuss informal threats that Chinese importers are passing on to Australian exporters. Importers said Beijing planned to ban wine, lobster, copper and other select goods from Friday.
An industry participant told the Financial Times that officials had warned them that bilateral relations with China were unlikely to recover in the short term and that they should consider other options.
The Australian government appears to have resigned itself to suffering an economic blow. . . because under such naked pressure they can hardly make a U-turn in foreign policy
The warning follows Beijing’s decision to impose punitive tariffs on Australian barley, restrict beef imports and open an anti-dumping investigation into wine exports after Canberra called for an investigation into the causes of the Covid-19 outbreak in Wuhan in April.
Since then, diplomatic and trade ties between nations have sunk to the lowest level in generations, and some Australian exporters have struggled to get their products through Chinese customs.
This week, up to A $ 2 million ($ 1.45 million) worth of Australian lobster was lost at Shanghai Airport when local officials ordered a series of new health and safety tests. Some coal exporters have indicated that they are also facing delays.
Australian Trade Minister Simon Birmingham said Friday the Chinese government denied that coordinated efforts had been made to contain Australian products. However, the minister said that what Canberra heard from Beijing and what exporters were experiencing was very contradictory.
“The ongoing reports we get from the industry and a number of different news sources are deeply troubling and there is no denying it or getting away from it,” he told Australian radio.
Mr Birmingham said the trade problems in recent months had dramatically increased the risks for Australian exporters to China, suggesting that some companies would inevitably start exploring alternative markets in Asia such as Japan, Korea and Indonesia.
China is Australia’s largest trading partner with two-way trade worth A $ 252 billion last year, making any attempt to diversify into other markets difficult. The timing of trade tensions is also a pain for exporters as demand for certain products like wine has plummeted during the coronavirus pandemic.
There appears to be little prospect of a quick recovery in bilateral relations. The state-run China Daily issued an editorial warning to Australia Friday that it would “pay tremendously for its misjudgment” if it works with Washington to contain China.
Richard McGregor, an analyst at the Lowy Institute in Sydney, said: “The Australian government seems to have resigned itself to suffering an economic blow even in the midst of a recession, as it can hardly turn its foreign policy about under such naked pressure. ”
Canberra has admitted that calls to Chinese colleagues are no longer being returned. Mr Birmingham said Friday that it was disappointing that Beijing still refuses to engage at ministerial level.