China’s targeting of Australian agricultural products with sanctions likely to backfire because “Australians don’t like being bullied”, a defence expert has said.
- Australian industry is bracing for $6 billion in further export bans
- Wheat, lobster, wine and timber among commodities to be targeted
- Defence expert suggests measures will backfire on Beijing
There are expectations Beijing will slap bans on an extra $6 billion of export commodities, including lobster, timber and wheat, as tensions between Australia and China escalate.
Relations between the two countries have been seen to be souring for years over a series of policy disputes.
This culminated in Prime Minister Scott Morrison calling for an inquiry into the origins and early handling of COVID-19.
Michael Shoebridge from the Australian Strategic Policy Institute said any further trade bans were unlikely to force a capitulation from Canberra.
According to Mr Shoebridge, China had wrongly assumed Australia would preference its economic interests with China ahead of other considerations, including national security.
China’s trade moves ‘misjudged’
“I think it’s a major miscalculation from Beijing,” Mr Shoebridge.
“My judgment about this is Beijing thinks that by adding some more pressure around trade and having particular interest groups in Australia pressure the Australian government, that will force a 180-degree turn on big issues.
“But I think that is a fundamental misjudgement because I think what is going to happen instead is that the example of what Beijing is doing in Australia will impact lots of other countries’ assessment of how they can engage with China.
“So, I think they’re likely to cause us to rely less on China economically, and if we rely on China less economically, then their ability to bully and coerce us using economic levers are likely to fall.”
Trade better with politics out
With Australian industry bracing for the touted bans, the country’s grains industry lamented what it said was an overly political relationship between Australia and China.
Grain Trade Australia chief executive Pat O’Shannassy said he did not want to further inflame tensions by blaming one side over the other, but he hoped the Federal Government could help mend ties.
Mr O’Shannassy said neither side benefitted in a trade war, noting that tariffs on Australian barley would cost the local industry $2.5 billion over five years while depriving Chinese buyers of their preferred product.
He also noted that China accounted for a “significant” 7 per cent share of Australian wheat export on average over the past five years.
Despite this, Mr O’Shannassy said Australian grain producers exported to more than 100 countries and they would “move on with life” regardless of what sanctions Beijing imposed.
Grain growers’ lives will ‘go on’
“It adds uncertainty and it adds risk,” Mr O’Shannassy said.
“And we have seen that risk in the barley situation.
“But the grains industry has been resilient over time and the one thing about our grains exports is we do tend to find our biggest markets in some of the flakier places of the world in terms of stability.
“So, for an industry, it’s not the first time we’ve come across these issues.
“It’s a major issue, but we’ll work through it.”
China boom was only temporary
The comments were echoed by Mr Shoebridge, who said the boom in Australian agricultural exports to China had been a relatively recent phenomenon.
He said Australian producers would remain competitive and profitable on the international market without China.
“Australia’s China market for a whole lot of our commodities and services has had a temporary boom and it’s really only been in the past five years that there’s been a startling boom,” he said.
“Just six years ago, those industries sold a fraction of what they sell into the Chinese market now.
“And yet, we were still quite profitable in those sectors.
“And it’s ended because the terms Australians can access the China market under have changed.”