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Australia has ignored China’s trade dispute and opened new markets


When China imposed sanctions on Australian barley last year, wheat farmers feared it could cost up to $ 2bn.

But 12 months later Beijing fired the first shot during a trade dispute with Canberra, farmers have reduced the damage by opening up new markets in Asia and Latin America.

“It’s a shame we played in politics and lost the money you earn from selling in China,” said Mic Fels, a farmer in Esperance in Western Australia.

“But Australian barley growers have had a great year because the global market has been equally strengthened by taxes and we have found new markets.”

Barley farmers’ comments were echoed in what other analysts say is a “economic coercion” campaign against Beijing against Canberra. Negotiations have been strained since Australia stepped up against the brutal outbreak of China in Asia and called for an international investigation into the coronavirus epidemic.

Coal, cattle, wine, timber, cotton and fish exports all have strong taxes or technical constraints, which have disrupted trade flows and threatened to support the Sino-Australian trade growth.

China’s exports account for one-third of all Australian shareholding, making Beijing the world’s largest trading partner with a net worth of $ 252bn in 2019 markets and diversity.

Their efforts appear to be paying off, as the impact on bilateral trade will not change as exports from Australia fall 2% to $ 145bn in 2020 compared to 2019.

Covid-19, history metal poles, Fluctuations in global market demand and fluctuations in currency exchange rates make it difficult to monitor progress. But analysts say trade disruptions are hampering Beijing’s ability to strengthen Canberra, giving China access to China’s economy.

“Right now Beijing’s bark is worse than its bite,” said Roland Rajah, an economist at the Lowy Institute, a think tank in Sydney. “Sales in China have fallen in areas where there were restrictions, but most of the lost trade has found other markets.”

Farmer Mic Fels, from Esperance in Western Australia

Farmer Mic Fels said Australian barley farmers continued to have a good year with new markets © Evan Collis

He to compare China’s export price, which met with taxes from Beijing, has dropped by about $ 11.7bn ($ 9bn) a year. But the cost of exporting the same items to the rest of the world has risen by A $ 13.4bn, according to trade statistics.

Rajah cites the example of coal, a very valuable commodity that meets technical barriers. The annual export price of Australia to China has dropped by A $ 6.5bn since the ban on ports was introduced in September 2020 while exports increased by A $ 9.1bn.

Coal exports decreased by 7.6% to 205.4m tons between October 1 2020 and the end of April 2021, according to a follow-up survey from Braemar ACM, an international shipping supplier. Strong growth in exports to India, Europe and Latin America helped to reverse the loss of the Chinese market.

“Australian exporters have done a good job of returning glass to markets outside China while China has exported more coal from Indonesia, Russia, Mongolia and South Africa among others,” said Abeminav Gupta of Braemar ACM.

Beijing’s main concern for new coal sellers is hurting Australian manufacturers, who are losing money to Chinese customers. It also damages China’s electronics and metal magnets, especially since Australian coal is often better than its competitors.

“China is paying the price for opposing its trade because it is not buying the best customers or getting the best products,” says Mark Melatos, of the University of Sydney.

An chart showing the export of Australian coal that was introduced into Chinese currency but diverted

Australian barley retailers have traded in new markets since China released 80% of its revenue in May 2020 following a drop-off survey.

“We have already started looking at new markets during [anti-dumping] questioning, although this should be done remotely because of Covid-19, “says Jason Craig of CBH, a wheat-growing organization.

The CBH reopened the Saudi Arabian market and shipped for the first time to Mexico last year, which prevented this in China. However, these new markets did not pay off you need what Chinese buyers did, which caused damage to all companies at around A $ 400m.

Not all sections performed very well. Chinese officials have left $ 2m of Australian crabs the decay at Shanghai airport in November over alleged security checkpoints, A $ 750-year-old expatriate export company has been suspended.

“The big difference is that the Chinese pay twice as much money as other lobster markets,” said Matt Taylor, chief of Western Australia Rock Lobster Council.

The companies have moved lobsters to South Korea, the US and Australia as well but the opening up of new markets has hampered the epidemic.

chart showing the decline in exports of Australian wine exports to China

Similarly, the Australian industry has been hammer and Chinese taxes up to 218%, which led to 96% annual exports to just $ 12m between December and March.

“Stone crabs, wine and table grapes have been hit hard because China was the only supplier of volumes exported by Australian manufacturers,” said Jeffrey Wilson at the Perth USAsia Center, a think tank.

But last year’s rise in commodity prices has made manufacturers more accustomed to losing money they pay to Chinese customers, he added.

“Instead of eliminating exports to Australia, what we have seen is the global markets that are preparing for the ban. There is always a market for export to Australia, even if it is a little cheaper.”


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