Australian exporters hopeful of Chinese trade restrictions being lifted

Chinese trade restrictions have targeted Australian products ranging from coal to wine for two and a half years. However, a diplomatic thaw between Canberra and Beijing is hoped to revive exports and trigger business success amid plans to rebuild ties.

Diplomatic thaw between Australia and Chine revives hopes for exporters

China first imposed trade restrictions for Australian products ranging from coal to wine in 2020. The restrictions came after years of disputes about espionage campaigns by Huawei and the effects of the COVID pandemic.

However, “trade blockages” valued at around A$20 billion, equivalent to $14 billion, show signs of these restrictions loosening. The two countries have been making concerted diplomatic efforts after the leaders, trade ministers, and foreign ministers from the two countries had a meeting in November.

The head of the Australian Forest Products Association said that agriculture officials in Australia had commented on talks with Chinese customs authorities because of log imports, which were once valued at A$600 million.

Last week, at least 15 vessels with Australian coal were headed for China as traders bet on removing trade barriers. Chinese cotton buyers have been importing Australian products in anticipation of the unofficial ban being lifted.

If the trade restrictions end, it would be an early success in the efforts being made by Australia to repair trade relations with China despite the country’s efforts to strengthen security ties with the United Kingdom and the United States through the AUKUS nuclear submarine alliance.

Nevertheless, the journey towards improved trade relations between Australia and China could be bumpy as Australia will announce more details about nuclear submarines in March. Beijing has opposed this initiative. The two countries are also engaged in a World Trade Organization conflict over anti-dumping tariffs on barley imposed by China.

The top diplomat for China in Western Australia, Long Dingbin, met with state Premier Mark McGowan last week. McGowan is planning a trip to China soon, marking his fifth visit to China since he took office.

Trade between Australia and China seems ready to commence

Chinese buyers have been looking towards buying Australian assets. Tianqi Lithium made a $136 million bid for an Australian Lithium developer, Essential Metals. The bid will test the regulatory appetite for investment in areas critical to national security.

The country’s Prime Minister, Anthony Albanese, said that Australia was considering the benefits of any deals but remained conscious about the sovereign capabilities of Australia. Traders are currently cautious about any possible bureaucratic delays. Last week, a shipment of Australian coal was diverted to Vietnam after remaining at the Chinese port for five days without unloading it.

While trade between Australia and China might resume, most producers plan to avoid being too reliant on China. Australian producers affected by the Chinese trade restrictions spent over two years looking for new customers, which would not be viable for them to give up.