China’s trade war with Australia is affecting a growing number of industries. How did we get here?
A trade spat bubbling away for months between China and Australia is threatening to boil over with growing calls for the Government to consider action at the World Trade Organization.
In its latest blow, China has blocked timber exports from two more Australian states, South Australia and Tasmania, after bans on Queensland and Victorian timber were introduced in the past two months.
Australian coal, barley, copper ore and concentre, sugar, wine and lobster have already suffered a similar fate.
So how did we get here and what does it mean for the future of China and Australia’s diplomatic relations?
Join three of the ABC’s China experts — international analyst Stan Grant, foreign affairs reporter Stephen Dziedzic and bilingual reporter Bang Xiao — on our Q&A live blog at 10:30pm AEDT today.
To get you up to speed, here’s a quick recap on how Beijing’s trade policies have sent Australian exporters into a tailspin.
First, it was barley
China fired its first shots at Australia’s export market back in May, by introducing a massive 80 per cent tariff on Australian barley imports.
The move threatened Australia’s $1.5 billion barley trade into China and led to West Australian farmers pausing their sowing mid-season.
Beijing claimed the tariffs were a result of anti-dumping and anti-subsidy measures against Australia, though Canberra and the grains industry have denied China’s allegations that Australian farmers are heavily subsidised.
It came in the wake of Prime Minister Scott Morrison’s calls for an international inquiry into the origins of COVID-19.
The decision inflamed Chinese hostilities and is widely seen as the spark which led to the ensuing trade dispute.
Australia’s barley industry was just the first to be caught in the crossfire.
Then, it was beef and coal
Just two days after the hefty barley tariffs came into play, China banned four Australian abattoirs — three in Queensland and one in New South Wales — from selling it beef.
At the time, Trade Minister Simon Birmingham said Chinese authorities made the decision based on “highly technical issues” to do with labelling and health certificate requirements, separate to Australia’s push for an investigation into COVID-19.
Since then, several more Australian abattoirs have been banned from selling meat to China — the latest suspension came just this week, and estimations put the total loss to the industry at hundreds of millions of dollars.
Australian exporters and industry heads feared more sectors would be targeted in an escalating diplomatic stoush.
They weren’t wrong.
In May, Beijing whacked informal quotas on coal, just days after announcing new inspection rules for iron ore imports.
It caused an immediate decline in ASX mining stocks, with one researcher in China calling the move “another implicit warning to Australia”.
For months, Chinese authorities kept almost $700 million worth of Australian coal held up at ports because of “environmental quality” problems.
It wasn’t the last time Chinese Customs would cause major delays to Australian exports.
Increased scrutiny on lobster and wine
Surprise lobster checks at Chinese airports were the next upset to Australian exports.
In November, tonnes of live lobsters were left stranded at Chinese airports and clearance houses, waiting to be inspected by customs officials.
$2 million worth of live rock lobsters ended up stranded on the tarmac in Shanghai, with China’s Customs agency alleging the lobsters may be contaminated.
Minister Birmingham warned of China’s possible “discriminatory screening practices” that could “imply a breach of WTO or CHAFTA [China–Australia Free Trade Agreement] commitments”.
It came as Chinese spinning mills were warned not to use Australian cotton and Chinese regulators began probing Australian wine production.
Australia’s wine exporters were already facing a drop in Chinese interest because of the pandemic, and many feared further declines during the diplomatic stoush.
The writing was on the wall by August, when China’s Government launched two separate investigations into Australian wine — first looking at dumping and then subsidy allegations.
Then in November, Beijing announced it would place tariffs of up to 200 per cent on all Australian wine imports, striking a massive blow to the $1.2 billion-a-year industry.
China chips at Australian timber
Biosecurity claims against Australia’s produce would continue to disrupt trade efforts.
In October, China’s Customs agency said it would block timber imports from Queensland after finding a bark beetle in a shipment.
Australian companies Emerald Grain and CBH were also suspended from exporting grain to China, with local officials claiming to have found weed seeds in a consignment.
China said its latest decision to ban timber exports from South Australia and Tasmania was to “prevent the pests entering China and to protect our country’s forestry and ecological safety”.
Last month, the Global Times — a Communist Party tabloid often used to send signals to other countries — confirmed what it called the “import suspension” in an English-language article.
The report was the first public confirmation from any Chinese government organisation of trade sanctions to damage Australia’s economy.
As ties between Beijing and Canberra further fray, Australia has said it is seeking partnerships with new markets, while continuing to raise concerns with China directly.