Chinese demand for Australian iron ore surged in June 2020, with Australia exporting a record 74% of its total imports to China, almost twice the single-month average of a decade ago. (AFP)
Australia-China relations have been deteriorating in recent years, and the Chinese Communist Party recently announced the “indefinite” suspension of the China-Australia Strategic Economic Dialogue. Australian-Chinese experts believe that the suspension of the Australia-China Strategic Economic Dialogue for a period of time, the Chinese Communist Party’s decision is only a gesture without any substantive significance. The Chinese Communist Party has sanctioned Australia’s exports of all commodities except iron ore, and there are no more cards to play. If the Chinese Communist Party dares to make any move on iron ore, it will be hurt far more than Australia.
On the 6th, the Chinese Communist Party’s Development and Reform Commission suddenly issued a statement announcing the “indefinite suspension of all activities under the China-Australia Strategic Economic Dialogue mechanism”, while the Australian side had previously cancelled the Belt and Road project in Victoria Province, while the 99-year lease agreement of the Port of Darwin was also proposed by a legislator for reconsideration, which Beijing claimed was due to the cold war thinking and ideological bias of some people on the Australian side. bias.
China’s New Sanctions Against Australia Have No Substance
Song Lu Zheng, a researcher in international relations at China’s Fudan University, told the media that the latest moves show that Beijing no longer has sufficient economic means to punish Australia, but will continue to play the diplomatic card.
Professor Feng Chongyi, a China expert at the University of Technology Sydney, told reporters that the Chinese Communist Party has no more tricks up its sleeve, and that its announcement to “indefinitely suspend the China-Australia Strategic Economic Dialogue” is just a statement, a symbolic one. The ministers have not met since then.
He believes that the decision is only symbolic, not substantive, and not something that is still going on and now given a halt.
“In fact, the Chinese Communist Party has used tariffs in other ways to punish Australia for exporting bulk commodities in the past few years, especially after Australia requested a neutral investigation into the origin of the new crown virus last year. It has all been included except for iron ore, all the bulk products from coal, copper, timber, wine, rice, lobster, cotton and so on.” He stressed.
China cut off iron ore fear of self-inflicted injury
In anticipation of the escalating trade friction between China and Australia, iron ore prices have soared since the end of December last year, and Beijing asked Tangshan iron ore mine to cut capacity in March, but the nation’s steel production in March still reached a new high since the end of August last year. So will the Chinese Communist Party boycott iron ore imports next? There is concern.
Feng Chongyi believes that the two sides will avoid the conflict of iron ore, but he stressed that “if the Chinese Communist Party wants to cut demand, the Chinese economy itself will be worse, and now China’s own problems are very big, China’s unemployment rate, economic growth in the trade war with the United States has been going down since, and then do this action, he will be hurt much more than Australia. “
He further analyzed, the Chinese Communist Party all day long to speak at any price, in fact, is the sacrifice of the interests of the people as the price, if really do economic warfare, the Chinese Communist Party to do so is to lose, it did not take advantage of.
“The pricing power is not on the Chinese side, now the demand is very strong, now it is a seller’s market, so now no matter what the Chinese Communist Party does, Australia is not constrained, those few big commodities exported to China, (Australia) are now opening up new markets. What has not hurt the Australian economy in any way is that he has new markets.” He said.
“And China is now not making any concessions in this area (of commodities), or continues to do so economically in a coercive, bullying way, and there is no reason for Australia to give in. This current relationship between the two sides will continue.”
China-Australia relations have the same conflicting values as China-US relations
Professor Feng Chongyi believes that China-Australia relations and China-US relations are linked together, with the second Cold War. Australia, the United States and the Western democracies are now realizing that it is they who are in a rather deep conflict with the Chinese Communist Party over ideology, values, values, value systems and institutions.
He analyzed that if Australia, like the United States, used economic means to counter China, it could not sell you iron ore, “because you (China) have a great need for this, you can’t buy such cheap and good quality elsewhere, and now the price has gone up again.”
“But Australia has not taken this step, the whole policy is only self-protection through the law, and there is no active sanctions against China. He now still wants to come back to the negotiating table on China’s economic engagement and resolve differences in a negotiated way.” He said.
“Australia itself doesn’t want to escalate the conflict, but it’s not going to be good to turn back either.”
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