Australia-China trade is in turmoil as Chinese retaliation against Australia escalates. The Australian government has urged China not to renege on Xi Jinping’s stated commitment to share Chinese markets globally.
Multiple sources have recently indicated that China is disrupting Australia’s normal trade relationship with China in a number of ways. Chinese importers have reportedly stopped placing orders with Australian wine exporters. There are reports from China that Chinese customs will refuse to clear Australian wine from Friday.
Australian lobster exporters are also in contact with the Chinese authorities to clarify whether a ban has been imposed on their shipments.
This week, China’s Third International Import Expo opened in Shanghai. At the opening ceremony, Xi Jinping promised the world, “Let the Chinese market become a world market, a shared market, a market for everyone, and inject more positive energy into the international community.”
Australia’s Trade Minister Birmingham said the problems experienced by Australian exports are clearly inconsistent with China’s message and “undermine the credibility” of Xi’s speech at the expo.
In a statement, Birmingham said, “If China is serious about its government’s statements, then it should convince people that imports such as seafood and wine should also enjoy normal tariffs and related procedures.”
Hong Kong’s English-language newspaper, the South China Morning Post, reported Friday (Nov. 5) that China may have to impose anti-dumping tariffs of up to 200 percent on Australian wine starting next week. Once the punitive measures are implemented, the SCMP said, Australian wine will be kicked out of the Chinese market.
Many Australian exporters are now at a loss, fearing that Chinese authorities may simply issue a ban on imports of Australian wine and other goods.
Li Wei, the chief executive of Sydney-based Australian wine exporter and producer Swan Wine Group, is disturbed by the development, saying that all of his Chinese customers have stopped placing orders.
The South China Morning Post quoted Li Wei as saying, “We really didn’t think we would reach this stage.” “We are very disappointed.”
“I think the Australia-China relationship has reached a freezing point. We hope the Australian government can come up with some viable strategy to revive it.”
China’s Ministry of Commerce launched an anti-dumping investigation into Australian wine in August. If China finds evidence of such “dumping,” it will impose tariffs of 202.7 percent, which would mean a threefold increase in the price of Australian wine, equivalent to a trade embargo, the South China Morning Post said.
The anti-dumping investigation could last up to a year, but observers believe it is possible that China could impose some sort of temporary anti-dumping measures on Australian wine before the investigation is completed.
Australia is China’s largest wine importer, ahead of France and Chile, and China imported 120 million liters of wine from Australia in 2019, more than tripling the 56 million liters in 2015.
The South China Morning Post said commercial agencies across China have been given verbal instructions that, starting Friday of this week, importers should no longer import Australian wine because the likelihood of their shipments being rejected by customs is “high”. There are indications, however, that wine already shipped from Australia may be cleared if Chinese importers give advance notice to customs authorities at the relevant ports.
Australia’s relations with China have deteriorated since April this year, when Australia called for an independent international investigation into the source of the neo-crown virus. China has taken a wide range of retaliatory measures against Australian barley, seafood, copper ore, wine, beef, tourism, and even universities. This retaliation has escalated significantly recently, creating significant uncertainty in bilateral trade activity.
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