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Australia rejects China trade dispute, opens up new markets


When China imposed punitive tariffs on Australian barley imports last year, grain farmers feared it would destroy $ 2 billion worth of industry.

But 12 months later Beijing fired the first shots In a trade dispute with Canberra, manufacturers limited their losses by opening up new markets in Asia and Latin America.

“It’s disappointing that we played for political purposes, we lost the pay you get from selling to China,” said Mick Fels, a farmer in Esperance, Western Australia.

“But Australian barley growers still had a good year, because the world market came together just after tariffs were applied. We found new markets.”

The experience of barley farmers has been replicated in other areas, which analysts say was an “economic coercion” campaign by Beijing against Canberra. Diplomatic relations have been strained since Australia pushed back the rise of Chinese aggression in Asia and called for an international inquiry into the origins of the coronavirus epidemic.

Coal, beef, wine:, timber, cotton and seafood exports face tough tariffs or technical hurdles that have disrupted trade and threatened to reverse a ten-year boom in Sino-Australian trade.

Goods sold to China account for more than a third of Australia’s exports, making Beijing the country’s largest trading partner in 2019. Bilateral trade worth $ 252 billion. With the slightest sign of melting relations, exporters are in a hurry to open up. և Diversify markets,

Their efforts seem to be paying off, as the overall impact on bilateral trade remains quiet, with Australian exports falling 2% to $ 145 billion in 2020 from 2019.

Covid-19, post iron ore prices, changes in world market demand և exchange rate fluctuations make it difficult to assess the exact impact of the measures. But analysts say the trade deficit weakens Beijing’s ability to arm Canberra hard and hit China’s economy hard.

“At the moment, the Beijing Peel is worse than being bitten,” said Roland Raja, an economist at the Lowe Institute at the Sydney Research Center. “Exports to China have collapsed in the sanctioned areas, but most of that lost trade seems to have found other markets.”

Farmer Mic Fels, from Esperance, Western Australia

Farmer Mick Fells says Australian barley growers still had a good year after finding new markets © Evan Collis

He: ratings: Exports from Beijing to China fell by about $ 11.7 billion ($ 9 billion) a year. However, according to trade statistics, the value of exports of these same products worldwide increased by $ 13.4 billion.

Rahah cites the example of coal, the most valuable commodity that has hit technical barriers. Australia’s annual exports to China fell by $ 6.5 billion after port restrictions were imposed in September 2020, while exports to the rest of the world increased by $ 9.1 billion.

Total coal exports fell 7.6 percent to 205.4 million tonnes between October 1, 2020 and the end of April 2021, according to Braemar ACM, a global broker-dealer. India, Europe ուժեղ Latin America Exports of strong export growth helped offset losses in the Chinese market.

“Australian exporters have done a good job of diverting coal shipments to markets outside China, while China has imported more coal from Indonesia, Russia, Mongolia and South Africa,” said Abhinav Guptan Braemar ACM.

Beijing’s new coal suppliers are hurting Australian producers, who are losing premiums paid by Chinese customers. But it also hurts China’s electricity generators and steelmakers, especially since Australian coal is often more environmentally friendly than its competitors.

“China is spending money on its trade diversion because it is not buying from the most efficient customer or getting so many quality products,” said Mark Melatos of the University of Sydney.

Chart showing Australian non-coal exports to China, but skewed

Australian barley exporters have also entered new markets after China introduced 80 per cent tariffs in May 2020 following anti-dumping inquiries.

“It simply came to our notice then [anti-dumping] “Although it should have been done remotely thanks to Covid-19,” said Ason Eason Craig of the Grain Cooperative CBH Group.

CBH reopened the Saudi market, sending its first shipment to Mexico last year, mitigating the blow of losing China. However, these new markets have not paid off surcharge: Chinese buyers did so, costing the entire industry about $ 400 million.

Not all areas are so effectively concentrated. When Chinese customs officers left $ 2 million Australian lobsters At the Shanghai airport in November, according to their security checks, the $ 750 million live export industry came to a halt.

“The big difference is that the Chinese pay twice as much for live lobster as other markets,” said Matt Taylor, executive director of the Rock Omar Board of Western Australia.

The industry has diverted crayfish to South Korea, the United States and all of Australia, but opening up new markets is difficult given the epidemic.

Chart showing sharp decline in Australian wine exports to mainland China

Similarly, there was the Australian wine industry with a hammer At China’s tariffs of up to 218 percent, which plunged exports by 96 percent between December and March, it was only $ 12 million.

“Rock crabs, wine և now table grapes have hit hard, as China was the only business market to take over the export volumes of Australian producers,” said Effrey Wilson of the Perth USA Research Center.

But rising commodity prices over the past year have helped manufacturers adjust to the loss of premiums paid by Chinese customers, he added.

“Instead of stopping Australian exports, what we have seen is an adjustment to global markets around barriers,” he said. “There will always be a market for almost all Australian exports, even at slightly lower prices.”



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