In May, Australia’s biggest trading partner slapped 80 per cent tariffs on barley, in retaliation at Prime Minister Scott Morrison‘s call for an inquiry into the origins of COVID-19.
Just two months later, Australia suffered a 38 per cent plunge in cereal and grain exports, official trade data released on Thursday showed.
China’s trade sanctions on Australia for daring to speak out about coronavirus are starting to really hurt – with rural export volumes suffering the biggest plunge in 37 years. Cereal and grain exports in July plummeted by 38 per cent
Overall rural exports plunged by 15.1 per cent in July – the biggest monthly decline since January 1983 when Australia was also in recession.
CommSec senior economic Ryan said China’s economic trade sanctions against Australia were beginning to show.
‘Could the escalating political spat between Australia and China be starting to bite?,’ he said.
‘Not good news for our farmers hit by bushfires, drought and COVID-19 restrictions.’
Rory Treadwell, an economist with BIS Oxford Economics, said rural goods were set to suffer.
‘Trade tensions with China continue to cloud the export outlook, particularly for some rural goods,’ he said.
Australia’s trade surplus plunged by 43 per cent in July to $4.6billion, from $8.1billion in June.
This marked the 31st successive monthly trade surplus despite China’s trade retaliation, the Australian Bureau of Statistics data showed.
In April, China’s ambassador to Australia Cheng Jingye threatened boycotts of wine, beef and university education as punishment for Australia speaking out on COVID-19 in Wuhan
Communist China has now banned a major grain exporter, CBH in Western Australia, from sending barley there, claiming there were pests in the produce.
Australia’s biggest exports to China
Iron ore: $65billion
Business services: $28billion
Liquefied natural gas: $18billion
Metallurgical coal: $10billion
Thermal coal: $7billion
Source: A Westpac analysis of Australian Bureau of Statistics and Australian Bureau of Agricultural and Resource Economics and Sciences data for 2019
China last week also suspended beef imports from a fifth abattoir in Queensland after Mr Morrison threatened to tear up Victoria’s Belt and Road deal with Beijing.
China’s customs authority claims it found the banned drug chloramphenicol in beef from the family-owned business John Dee Warwick.
Nonetheless, Australia’s annual exports to China during the last financial year hit a new record high of $151billion – with the Communist nation buying 34 per cent of all Australian exports.
Like two-thirds of nations, Australia has China has its biggest trading partner.
The Australian Strategic Policy Institute said the Communist power used coercion to bully smaller nations politically, adding this style of wolf warrior diplomacy was set to worsen.
‘China is the largest trading partner for nearly two-thirds of the world’s countries, and its global economic importance gives it significant leverage,’ it said in a report by Fergus Hanson, Emilia Currey and Tracy Beattie.
‘The impacts of coercive diplomacy are exacerbated by the growing dependency of foreign governments and companies on the Chinese market.’
In April, China’s ambassador to Australia Cheng Jingye threatened boycotts of wine, beef and university education as punishment for Australia speaking out on COVID-19 in Wuhan.
Despite China’s threats former Liberal trade minister Andrew Robb (pictured right with former prime minister Tony Abbott and China’s minister of commerce Gao Hucheng), the architect of a China-Australia free trade deal in 2015, insisted trade fundamentals were the best ever
Despite that former Liberal trade minister Andrew Robb, the architect of a China-Australia free trade deal in 2015, insisted trade fundamentals were the best ever.
‘Our relationship at a political level has become difficult but the relationship at a commercial level has never been better,’ he told Daily Mail Australia on August 28.
He runs a lucrative consultancy advising Chinese firms on how to do business in Australia.
‘The relationship has never been better because of the free trade agreement,’ he said.
‘We, in the world, need a working relationship with China coming out the other end of the pandemic because we, including China, will struggle to restore the prosperity that all the world, that many parts of the world was experiencing.’