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Hundreds of thousands of bottles of Australian wine were waiting to be cleared through customs at Chinese ports in November when Chinese authorities decided to impose punitive tariffs of up to 212 percent 24 hours in advance.
This summer, fresh lobsters and shellfish were left at airports for several days so shipments could be checked for “heavy metals.” An Australian timber import ban has been introduced after two beetles were found in a shipment.
War with the most important customer
China is now hitting the largest Australian export sector with a direct import ban on coal, worth AU $ 14 billion a year in 2019 (SEK 91 billion).
Other parts of the mining industry are also affected by the conflict. This was compounded when Australia supported an independent investigation into where the corona virus originated and after Huawei was banned from developing 5G.
“We don’t understand why the government has decided to wage a war with our most important client,” James Robson, owner of Ross Hill Wines, told ABC News.
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Five years have passed since China and Australia signed a comprehensive free trade agreement. Has fulfilled. Two-way trade has increased by A $ 100 billion over the period, to A $ 250 billion (1630 billion crowns).
Armed foreign policy
No industrialized country is more dependent on the Chinese market than Australia. The Australian economy had nearly 30 years of continuous economic growth until early this year, when the corona pandemic and shutdown led to a recession.
– Australian foreign policy towards China has been armed. This is largely due to the fact that security, defense and intelligence organizations have taken over in the past six years, former Australian Chinese Ambassador Geoff Raby tells the Financial Times.
The party comes to an end
By affecting the Australian mining industry, this could force changes in the Australian economy and climate policy, something Prime Minister Scott Morrison has been unwilling to do. Most recently this week, he said that “there are other markets for Australian coal.”
This can be tricky. Major Asian markets like Japan, South Korea, and Taiwan want to be less dependent on coal. Together with the EU and China, they aim to become climate neutral in the next 30-40 years.
Coal has a history of more than 220 years in Australia and has grown strongly in recent decades with more than double the production from 1990 to 2017.
– Australia is like the party lion in his 40s who lives like he’s 20 years old. Everyone else takes this seriously, knowing that their health depends on it. Australia is trying to continue as before, director Richie Merzian of the Australia Institute think tank tells the New York Times.
He believes Australia will be forced to readjust, although it will be a while before this assimilates.
– Shock is coming
Energy investor Alex Turnbull, the son of a former Australian prime minister, believes Prime Minister Morrison has no choice but to make a political change.
– No matter how much the Australian leader wants to hold onto the coal, this shock comes. We just have to realize that this is contrary to export markets. This is the best opportunity to make changes, since it is no one’s fault, Turnbull told the New York Times.
Chinese imports of Australian coal have fallen from 9.44 million tonnes in May to 1.79 million tonnes in November. There are more than 50 ships in Chinese ports fully loaded with Australian coal. Last year, coal, iron ore and other minerals accounted for 68.7 percent of exports to China.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases via a link, which leads directly to our pages. Copying or other use of all or part of the content may only be done with written permission or as permitted by law. For more terms, see here.
