China’s threats to destroy Australia’s economy over the coronavirus inquiry are just empty ‘sabre rattling’ to make a point, experts claim.
Economists believe a trade war would hurt China too much as it relies on its Western neighbour for iron ore, energy, and agriculture.
China banned beef from four major Australian producers and slapped an 80 per cent tariff on barley in what is feared to be the start of a $135 billion retaliation.
Even Trade Minister Simon Birmingham told wine and cheese exporters to make sure all their paperwork was in order so as not to give Beijing any excuse to ban them too.
Economists believe a trade war would hurt China too much as it relies on its Western neighbour for iron ore (pictured), energy, and agriculture
China is dead against an inquiry into the origin of coronavirus as it is accused of covering up the severity of the pandemic, believed to have begun in a live animal market
The diplomatic spat began when Prime Minister Scott Morrison called for an inquiry into the origin of coronavirus in Wuhan.
China is dead against this as it is accused of covering up the severity of the pandemic, believed to have begun in a live animal market.
The Global Times, a mouthpiece for the communist government, dialed up the drama by accusing Australia of ‘exploiting’ China and presenting itself ‘as a victim’.
‘From China’s perspective, Australia has never been a friendly trading partner,’ a piece in the state-run Global Times said.
‘And consultations with the country on trade issues have always been frustrating, which has apparently weakened its motivation to promote bilateral trade.
‘The Australian government seems more interested in exploiting China’s suspension of some beef imports and its potential imposition of tariffs on Australian barley to describe itself as a victim of trade sanctions.’
But economists believe the threats, first made by the Chinese ambassador in a newspaper interview last month, are just posturing.
University of NSW academic and former Austrade economist Tim Harcourt said Australia was a reliable supplier Beijing couldn’t do without.
The federal trade minister has told Australian companies to make sure all their paper work is in order for exporting products to China. Pictured: Melbourne’s Say Cheese festival
‘A boycott of Australian goods would really hurt China – they’ve got energy and food security issues, they need iron ore they need expertise, and they want their kids to get a quality education,’ he told Daily Mail Australia.
‘China doesn’t really want to hurt itself, it just wants to make a point and then they’ll move on.’
Mr Harcourt said China was a massive consumer market with a population of 1.3 billion people and a growing urban middle class.
This meant consumers there were demanding better quality products and services, many of which needed to be sourced overseas.
‘They need energy security, food security, quality education, expertise in skills and infrastructure as they make the transition from being a ‘nation of shippers’ to a nation of shoppers’ with consumption and investment,’ he said.
‘The days of China being a low labour cost mass manufacturer are over and they have a burgeoning middle-class consumer base.’
Mr Harcourt said China’s ‘long march to middle class consumerism’ gave Australia a ‘mining boom and a dining boom’ for 12,000 exporters – which China needed.
He also argued China was not as against the coronavirus inquiry as it seemed, it just wanted to show it wouldn’t be pushed around.
Beijing would welcome the inquiry so long as it was transparent and international and the dispute was just over the terms.
‘It would be in China’s interest and an opportunity for China to show leadership and international co-operation,’ he said.
Australia’s call for an independent inquiry into the causes of COVID-19 has stirred diplomatic tensions with China, where consumers rely on wet markets (like this one pictured in Guangzhou) for their food
‘Most importantly, an inquiry into the causes of this pandemic may help us prevent another one, or at least manage it more effectively.
‘That outcome would be good news to the Chinese people and to the global community.’
China on Friday said it would submit to an inquiry so long as it was conducted by the World Health Organisation.
More than 100 have nations joined Australia to demand an independent investigation into the international response to the pandemic and the actions of the World Health Organisation.
The resolution will be put to the World Health Assembly for a vote on Tuesday.
Mr Birmingham said the government were given no advanced notice of China’s plans to implement the barley tariff, calling it ‘deeply disappointing’.
Australia’s biggest exports to China
Iron ore: $63.12 billion
Natural gas: $16.64 billion
Coal: $14.12 billion
Education: $12.1 billion
Tourism: $4.25 billion
Source: Department of Foreign Affairs and Trade 2018-19 data for Australia’s exports to China
Australia sends between half and two-thirds of all its barley to China, making this decision a crushing blow to thousands of farmers.
Australia is also the biggest barley supplier to China, exporting between $1.5 billion and $2 billion worth a year, which is more than half its exports.
Besides the beef ban, which China claimed was a regulatory issue unrelated to the inquiry issue, Chinese buying has only boomed as both countries shake off the pandemic.
Australian coking coal imports hit 4.3 million tons in March, up 105 per cent from the previous year, and were three quarters of its coal imports.
Figures from Energy Quest predict Australia sent 40 shipments of liquid natural gas to China in April, up 29 in March and 36 in April last year.
Iron ore imports also jumped 32 per cent in March after falling nine per cent in February.
Beijing has a track record of using putting pressure on exporters during political disagreements.
It includes encouraging a boycott of South Korean cars after the country deployed a US missile shield in 2017 and a ban on Norwegian salmon after Chinese rebel Liu Xiaobo won the Nobel Peace Prize in Oslo that same year.
Australia and China have had a free trade agreement since 2015 but some exporters have still run into difficulties as relations have soured.
In 2018 Beijing imposed new customs regulations on Australian wine resulting in shipments being held up in Shanghai.
China is by far Australia’s biggest education export market, with their demand worth $12.095billion in the 2018-19 financial year, Department of Foreign Affairs and Trade data showed
The Centre for Independent Studies, a free market think tank, last year warned Australia’s universities could collapse if fewer Chinese students enrolled
AMBASSADOR’S ECONOMIC THREAT TO AUSTRALIA
In an interview with the Australian Financial Review, Ambassador Cheng slammed Australia’s push for a global inquiry as ‘political’ and warned Chinese consumers could boycott the country.
Answering a question about whether China could boycott Australian iron ore or gas, Mr Cheng instead focused on China’s contribution to Australia’s agriculture, tourism and education sectors.
Mr Cheng said: ‘I think if the mood is going from bad to worse, people would think why we should go to such a country while it’s not so friendly to China.
‘The tourists may have second thoughts. Maybe the parents of the students would also think whether this place, which they find is not so friendly, even hostile, is the best place to send their kids to.
‘So it’s up to the public, the people to decide. And also, maybe the ordinary people will think why they should drink Australian wine or eat Australian beef.’
And last year – after Canberra stripped Chinese businessman Xiangmo Huang of his visa – major ports prolonged clearing times for Australian coal to at least 40 days, claiming the delay was due to ‘normal’ safety checks.
The latest difficulties in the bi-lateral trade relationship followed the Australian government’s call for a ban on wildlife wet markets and an inquiry into how the coronavirus originated and spread from Wuhan.
The proposed inquiry – as well as repeated suggestions that China covered up the spread of the disease – have infuriated Beijing.
Last month the Chinese Embassy called Home Affairs Minister Peter Dutton ‘pitiful,’ ‘ignorant’ and a US ‘parrot’ after he told China to ‘answer questions’ about how coronavirus started.
On April 26 Chinese Ambassador to Australia Jingye Cheng warned that Chinese consumers may stop buying Australian products in revenge.
‘Maybe the ordinary people will think why they should drink Australian wine or eat Australian beef,’ he told the AFR.
Australia China Business Council chief executive Helen Sawczak stoked the fire and declared trade ties should come first.
‘There has been a lot of talk about national security concerns but these should not be overriding our economic interests,’ she said on Wednesday.
‘In Australia the whole debate on China has been wholly focused on national security and when we talk about national security we really mean anti-China.
‘If the intelligence agencies were managing our economic interests then this country would go down the gurgler, we have always relied on foreign investment – we are not a nation of savers.’
Chinese Ambassador to Australia Jingye Cheng (pictured) warned Chinese consumers may stop buying Australian products
Ms Sawczak, a director of Clean Seas Seafood which exports yellowtail kingfish to China, said there was a perception in China that Australia hated it.
The dispute comes after a torrid year for Australia-China relations saw clashes over political interference, human rights abuses in western China and Huawei 5G equipment.
The proposed tariffs on barley come after China’s 18-month anti-dumping investigation which concludes on 19 May.
Dumping is when a country exports a product unfairly cheaply to a foreign market to undercut alternatives, with producers often subsidised by the government.
China said the suspension of beef imports was due to a labelling issue.
Senator Birmingham said the issues are being resolved and hopes exports from the blacklisted abattoirs can resume soon.
TIT FOR TAT: TIMELINE OF AUSTRALIA’S DEEPENING COVID-19 DISPUTE WITH CHINA
February 1, 2020: Australia bans foreign nationals who have travelled in mainland China from entering the country for 14 days
February 13: As the travel bans are extended, the Chinese embassy lashes out, labelling Australia’s move as ‘extreme’ and an ‘overreaction indeed’
April 15: Treasurer Josh Frydenberg savages the World Health Organisation (WHO) for supporting the reopening of Chinese wet markets
April 19: Foreign Minister Marise Payne calls for a global inquiry into the origins of the coronavirus pandemic and China’s handling of it
Senator Payne tells the ABC such an inquiry should be run independently of the WHO.
April 26: China’s ambassador, Cheng Jingye, warns the Morrison government its inquiry push could cause a Chinese consumer boycott.
Mr Cheng warns tourists ‘may have second thoughts’ and students’ parents would wonder if Australia is ‘the best place to send their kids to’, and that consumers may not want to buy Australian wine or beef
The Australian government fires back, with Senator Payne saying the country rejects ‘any suggestion that economic coercion is an appropriate response to a call for such an assessment, when what is needed is global co-operation’.
April 28: Chinese embassy releases an unusual statement describing a call with the bureaucrat in charge of Australia’s Department of Foreign Affairs and Trade (DFAT)
In a statement, DFAT says it ‘regrets’ the release of ‘purported details of official diplomatic exchanges’.
The department will not respond by itself breaching the long standing diplomatic courtesies and professional practices to which it will continue to adhere,’ DFAT said.
Editor of state-run Global Times Hu Xijin, shares a post on Weibo saying ties between Australia and China would continue to deteriorate, describing Australia as ‘gum stuck on the sole of China’s shoes’.
‘After the epidemic, we need to have more risk awareness when doing business with Australia and also when we send our children to study there,’ he wrote.
‘Australia is always there, making trouble. It is a bit like chewing gum stuck on the sole of China’s shoes. Sometimes you have to find a stone to rub it off.’
April 29: Hu Xijin writes a Twitter post admitting China would try to us economic coercion on Australia.
‘Let me give a “coercion” to Australia,’ he wrote.
‘As its attitude toward China becomes worse and worse, Chinese companies will definitely reduce economic cooperation with Australia.
‘And the number of Chinese students and visitors going to Australia will also decrease. Time will prove it all.’
Victorian Consul-General Zhou Long hijacks a government press conference alongside billionaire mining boss Andrew Forrest to discuss his procurement of 10million testing kits from China to be used in Australia.
Mr Zhou uses the opportunity to praise Beijing’s handling of the pandemic.
Liberal MP Andrew Hastie said Mr Forrest had allowed the Chinese Communist party to ‘ambush the press conference’.
‘Now is not the time for games. Australia must come first,’ Mr Hastie said. ‘This guy drops out of the sky in his private jet and enables the Chinese Communist Party to ambush a commonwealth press conference. Yeah, we’re not happy.’
After the event, former Prime Minister Malcolm Turnbull urges Australia not to anger China.
‘An Australian prime minister who ends up in conflict with China cannot expect any support or solidarity from the Australian business community,’ he wrote on Twitter on Wednesday night.
‘Overwhelmingly, they’re totally invested in the economic benefits of the relationship.’
May 3: Shanghai academic Professor Chen Hong accuses Australia of ‘stabbing China in the back’ over its call for an inquiry in a 60minutes interview.
‘This kind of investigation actually proposed by the Australia side is not an investigation. It’s called an independent inquiry talking about the lack of transparency. That is actually what is about,’ he said.
‘That is actually the problem as there’s no such thing as lack of transparency in the Chinese side.
‘Australia is being and acting as a kind of divisive role, trying to point fingers, even stab at the back of China. This is actually not fair.’