China fires new $6bn trade shot with new Australian import bans

Chinese state media has confirmed a sweeping halt on Australian imports worth more than $6bn a year.

Managing Director Ferguson Australia Group Andrew Ferguson. Picture: Morgan Sette

Chinese state media has confirmed a sweeping halt on exports from Australia worth more than $6bn a year from Friday, days after Beijing dismissed the discriminatory ban as a “rumour”.

The Global Times, a state-controlled tabloid, made the extraordinary admission in a report called “Australia nervous at losing Chinese market”, part of a package of stories about the country’s biggest trade fair, which opened on Wednesday.

The Global Times reported that Australia’s ambassador to China, Graham Fletcher, was in Shanghai to attend the China International Import Expo.

“[His] visit came after China halted seven categories of Australian goods from the market,” the state-controlled tabloid wrote, seemingly confirming a discriminatory trade ban Chinese officials have previously denied.

Australian companies who last year exported $149bn of goods to China have been rattled by reports this week of a ban on Australian wine, lobster, copper, sugar, timber and coal that arrives in China after Friday.

That anxiety was heightened as wine destined for the Shanghai trade show — a centrepiece event for Australia’s biggest trading partner — was halted at customs.

The trade show blockade came after more than $2m of live Australian rock lobster was spoiled after a four-day delay last week at Shanghai Pudong Airport.

Chinese authorities have not confirmed the ban to the Australian businesses that would be affected, leaving them on edge as the deadline approaches.

Trade Minister Simon Birmingham asked for clarity on the situation.

“Continued uncertain and inconsistent messages from China are heightening risks and undermine the statements made by President Xi at this year’s China International Import Expo,” senator Birmingham said.

“If China is to be true to the statements of its Government then it should provide confidence that normal customs and related processes will apply to imports of goods such as seafood and wine,” he said.

China’s Ministry of Commerce in Beijing told The Australian on Tuesday that reports about the sweeping ban were “rumours”.

The Global Times report which confirmed the ban said it had “sent shockwaves to Australia”.

Citing Chen Hong, director of the Australian Studies Centre at East China Normal University in Shanghai, the tabloid said Australia had damaged the bilateral relationship by “spearheading the US’ anti-China campaign and restricting Chinese firms”.

“There is no substitute for the Chinese market for Australia. But for Chinese people, Australian goods have many alternatives,” it quoted Professor Chen as saying.

Professor Chen was this year banned by Australian security agencies from entering the country.

State media’s apparent confirmation of the Australian ban came after President Xi Jinping said in a speech opening the trade fair that China wanted to bring “more positive energy” to the global community.

“Our aim is to turn the China market into a market for all the world, a market shared by all, and a market accessible to all,” President Xi said in his video address on Wednesday.

“Faced with the challenges brought by economic globalisation, we must not allow unilateralism or protectionism to undermine the international order and international rules.”

The wine industry’s anxiety over a a ban had already been stoked as Australia’s biggest wine producer, Treasury Wine Estates, revealed on Wednesday that Beijing was considering further fin­ancial punishment for the $6bn, ASX-listed company.

“Everyone is in the freak-out zone,” said one Australian wine-seller involved in the Shanghai trade fair, who asked not to be named.

Beijing has this year announced an ongoing dumping investigation into Australia’s wine industry, halted imports from major beef producers, imposed an 80 per cent tariff on barley, apparently interfered with purchases of coal and cotton, and last week banned timber from Queensland.

Perth USAsia Centre economist Jeffrey Wilson said the timing suggested the move was aimed at trashing Australia’s last opportunity this year to sign new deals with buyers.

“The likely target is actually the Shanghai trade show, by creating an environment of uncertainty for Chinese importing companies,” Dr Wilson said.

Australia’s lobster and wine industries, which last year exported a combined $2bn to China, have halted exports to the mainland following earlier, unverified reports of the ban.

China’s Ministry of Commerce in Beijing earlier told The Australian it had no knowledge of a meeting that, according to circulated notes, outlined a sweeping ban on trading with Australia for products that arrived after Friday.

“We did not hold such a meeting, neither did we issue the ­notice, nor do we know about such rumours,” a ministry spokesperson said.

A spokesman for China’s Ministry of Foreign Affairs did not directly answer questions about a ban.

One person highly exposed to the Chinese market said, real or not, it was spooking Australian business and their Chinese partners. “It’s good economic pressure,” the source said, asking not to be named because of the political sensitivities.

Andrew Ferguson, founder of the South Australian-based lobster exporter Ferguson Australia Group, was one exporter whose premium lobsters were among those killed and spoiled in Shanghai. He called on the Morrison government to help repair the ­relationship with Australia’s biggest trading partner.

“I don’t want to be dictating terms but we need to maintain our strong relationships with China,” Mr Ferguson told The Australian.

“All I’m trying to get across is that we’re concerned. And we need the government’s help to back us up.”

Simon Birmingham called on China to honour its commitments under the China-Australia Free Trade Agreement and abide by World Trade Organisation rules.

“Australia is a country who plays by the rules when it comes to our trading obligations,” he said.

“We expect our major partners to do likewise. And there certainly should be no disruptions or distortion in terms of governments seeking in any way, shape or form to influence what should otherwise be commercial transactions between businesses and consumers.”

China analyst Richard Mc­Gregor said the CCP was telling Chinese importers to “get your stuff from countries other than Australia”.

“In the past, The Global Times and the like have said that a lot of what the Chinese buy from Australia is replaceable from other sources. And now they are going about replacing it,” the Lowy Institute China program director said.

Warwick Smith, head of the Business Council of Australia’s committee on China and a close adviser to businessman Kerry Stokes, said it was too early to be sure what was happening but “the collective impact is not helpful to Australia”.

“We are a trading nation that needs to trade more and with greater diversity, given the growth needs and economic pressures we and every other nation are under,” he said. “The engagement in trying to resolve these issues is something we all take very seriously.”

Political divisions within both major parties are rising over how to handle the China relationship.

Senator Eric Abetz, condemned by many after calling on Chinese Australians to denounce the Chinese Communist Party, said Australia must put values ahead of trade relationships.

“This should not be happening but at the end of the day, we have values and beliefs for which our fellow Australians died,” he said.

“We do not want to sell out their legacy. Our values and beliefs are worth maintaining.”

In a swipe against his parliamentary colleague, Liberal sen­ator Andrew Bragg hit out at what he called “unsophisticated commentary” on the China ­relationship.