Why the China exports stoush is scary for Australia

The impact of China’s tough stance towards Aussie exports is already being felt financially, but it could get worse. Anthony Keane explains why.

Opinion: All this angst from China towards Australia and our exporters is becoming a big worry.

Our biggest trading partner has been deeply upset with us since ScoMo and his team had a crack at them over COVID in April, and the punches keep coming.

Barley, timber, food, wine, copper and sugar are among the Aussie products that have been targeted by Chinese authorities with things such as bans and tariffs this year.

Local food and wine exporters have had to bring back products that were prevented from entering China.

I’m scared about how far this will go and what damage it will do to our businesses, our economy and our investments.

A dark cloud has been hanging over wine exports to China. Picture: Noel Celis/AFP

Calling China our biggest trading partner is a huge understatement.

I was recently looking at the latest Australian Bureau of Statistics data on merchandise exports – as we finance nerds sometimes do – and discovered that China dwarfed everyone else.

The $11.7 billion of goods we sent China in September was almost greater than the next nine countries combined – including Britain ($1.4 billion), the US ($1.1 billion), India ($1.1 billion) Singapore ($912 million) and New Zealand ($867 million).

And that doesn’t include education exports, which are on hold this year because of COVID-19 but have previously been dominated by Chinese students studying in Australia.

It’s no wonder there’s been a conga line of business leaders calling for calm and improved diplomacy.

If the Chinese really want to hurt us financially, they can.

They are a huge part of our export mix but we’re a small part of theirs – less than 2 per cent.

If our businesses struggle, our investments and superannuation balances struggle too.

Some commentators say our government should have let a larger and less-reliant-on-China country demand a global inquiry into the handling of the coronavirus outbreak. It was brave, for sure, but perhaps too crazy-brave.

Australia‘s exports to China are many times larger than other nations. Picture: STR/AFP

It’s a horrible political situation. Our government ministers are unable to get Chinese officials on the phone, but are still sticking to Aussie beliefs and values and angering them even more by getting friendlier with Japan and India in recent times and calling out foreign cyber attacks from a “sophisticated state-based cyber actor”.

Politics is not my thing, but money is. Hopefully this drama will all blow over, but maybe our businesses and other leaders need to start thinking about a Plan B, C and D rather than rely on one massive market.

China was first into the COVID crisis, but now that it’s recovering well its economy is booming and it will want even more stuff from countries all around the world.

Economists say China can’t shut us out completely because they need our raw materials to grow their economy. And if they take goods from other countries, someone will have to fill that gap in global markets.

Australia’s reputation for quality and cleanliness should help us with securing future exports.

And our handling of COVID-19 so far should make us attractive to much of the world in the next few years.

@keanemoney