China has ordered traders to stop buying at least seven categories of Australian commodities, increasing tensions with a key trading partner in its most radical retaliation yet. Commodity traders in China will not be able to import products such as coal, barley, copper ore and concentrate, sugar, wood, wine and lobster, according to people familiar with the situation. The government ordered the ceasefire to begin on Friday, said one of the people, who asked not to be identified as the information is sensitive.
The notice was verbally relayed to major traders in meetings in recent weeks, one of the people said. Iron ore, Australia’s biggest export to China, will not be included in the suspension, the people said. The order represents a dramatic deterioration in ties, which have been strained since Australia banned Huawei Technologies Co. from building its 5G network in 2018 on national security grounds. Relations have been in free fall since the government of Prime Minister Scott Morrison in April called for an independent investigation into the origins of the coronavirus.
“China seems determined to punish Australia and set an example for other countries,” said Richard McGregor, a senior fellow at the Sydney-based think tank Lowy Institute. “They want to show that political disagreements have a cost.”
China has already banned meat imports from four Australian slaughterhouses, delayed lobster shipments from customs clearance, imposed tariffs of more than 80% on barley and said it will not allow timber from the state of Queensland due to pests. The wine is also under an anti-dumping investigation, while Chinese power plants and steel mills have been told to stop using Australian coal. Cotton purchases have also been suspended.
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Relevant departments in China carried out inspections and general quarantine measures on certain Australian products in accordance with laws and regulations, Foreign Ministry spokesman Wang Wenbin said at a briefing on Tuesday in Beijing. China hopes Australia will do more to bring bilateral relations back to normal soon, he said. China’s customs authority and Commerce Ministry did not respond to faxes seeking comment. At least one customs clearance company began stopping shipments of the seven types of products on Tuesday, one person said. China will also ban Australian wheat shipments from a date yet to be revealed, according to the South China Morning Post, which previously reported on impending bans on other Australian staples.
The Australian government is working with domestic industry and consulting with Chinese authorities on the reports, according to an emailed statement from Commerce Minister Simon Birmingham. “China has consistently denied any attack on Australia and has spoken of its commitment to trade rules,” the statement said. “In the spirit of his remarks, we urge the relevant Chinese authorities to address the concerns of sectors such as seafood trade to ensure their products can enter the Chinese market without disruption.”
China is Australia’s most important trading partner, with agricultural shipments totaling approximately A $ 16 billion ($ 11.3 billion) in 2018-19. With Australia in the middle of its first recession in nearly 30 years, Beijing’s sweeping trade measures couldn’t come at a worse time for the Morrison government.
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Australia is the world’s most China-dependent developed economy and finalized a comprehensive free trade agreement with Beijing in 2015, a year after President Xi Jinping paid a state visit. But Huawei’s ban and laws against foreign interference that Canberra says were designed to reduce Beijing’s “meddling” in its internal affairs marked the end of those cordial ties. Former Australian treasurer Joe Hockey, who helped oversee the trade deal, on Tuesday accused Beijing of harassment and immature behavior.
“The problem is that China just doesn’t want to talk,” Hockey, who until January served as Australia’s ambassador to the United States, said in a Bloomberg Television interview from Washington. Instead, they just want to react aggressively and try to intimidate us. And harassment never works with Australia. “
McGregor, who said he does not know the veracity or specific details of all recent commercial retaliation, called Morrison’s demand for a coronavirus investigation a miscalculation.
“Australia and China were always going to go their separate ways,” he said. “But the call for investigation quickly turned the relationship into a very ugly divorce.”
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