China’s nationalistic Global Times newspaper has warned that tariffs on the $600m import of Australian barley to China could become the “start to a series of retaliatory measures against Australia.”
The editorial, written before the news on Tuesday that China was temporarily suspending the import licenses of four Australian meat processing plants, warned that relations between Australia and China were moving towards their “lowest point in decades.”
Headed “Chinese businesses need to watch out for risks from Australia,” the editorial accuses the Morrison government of “joining in on the China blame game” over the origins of the COVID-19 pandemic.
“If China-US ties continue to deteriorate, the uncertainty surrounding China-Australian relations will also deteriorate,” it warns.
“Such uncertainty will inevitably lead to economic repercussions,” it says.
“It now seems necessary to advise Chinese people and companies to watch out for potential risks when it comes to doing business or studying in Australia.”
While the comments are not official government policy, the English language version of the Global Times plays an important, informal role in signaling views in China against actions taken overseas which are perceived to be anti-China.
Recent warnings
The comments are in line with recent warnings by China’s Ambassador to Canberra, Mr Cheng Jingye, that Australian beef and wine and other exports could face problems if Australia persisted with its high-profile stance on calling for an inquiry into the origins of the COVID-19 pandemic.
The Chinese government has officially dismissed suggestions that its proposed tariffs on Australian barley imports are politically motivated, arguing that they are part of the normal trade dispute handling process.
“This is a normal trade remedy investigation,” China’s Ministry of Foreign Affairs spokesman Zhao Lijian said at a briefing in Beijing on Monday night.
“The Chinese side is moving ahead with the investigation in accordance with the relevant laws and WTO rules.”
But the Communist Party-owned Global Times has carried articles on two successive days warning that warning that Australian exports to China faced problems as a result of the federal government’s stance in calling for an inquiry into the COVID-19 pandemic.
In an article on Sunday, the paper said Australia could face “much bigger problems” than its current concerns over its $600m barley trade with China “if it continues unfriendly action against China”.
It warned that “deteriorating ties could result in severe damage to bi-lateral trade between Australia and China.”
Not the only problem
Titled “Tariffs not the only problem China may face: Chinese experts”, the articles note that “ties between China and Australia have deteriorated in recent years, especially since Australia followed the US move in trying to blame China for the pandemic and launched political attacks on China”.
It quoted Jiang Yong, an expert at the China Institutes of Contemporary International Relations in Beijing, as warning: “China has more measures than tariffs to respond to Australia’s unfriendly actions if it keeps doing so.”
Mr Jiang noted that most of Australia’s exports to China were “bulk commodities such as agricultural products which are highly replaceable”.
“Amid the worldwide economic downturn caused by the COVID-19 pandemic, China could easily find some alternatives,” he said.
Vote with their feet
The article also quoted another commentator, Yu Lei, a chief research fellow at the Research Centre for Pacific Island Countries at Liaocheng University, as warning that Australian exports to China such as tourism, education, and insurance, “could still be affected by deteriorating ties as Chinese people vote with their feet”.
Australia’s Trade Minister, Simon Birmingham, said on Tuesday that the government was “concerned” by China’s actions after it was notified late on Monday that the meat facilities had been suspended by Chinese officials over issues related to “labelling and health certificate requirements”.
The comments from the Ministry of Foreign Affairs come as Australian barley producers and the federal government are working on a submission to present to China’s powerful Ministry of Commerce (MOFCOM) to head off the imposition of tariffs of up 80 per cent on the $600m Australian barley trade to China.
The imposition of tariffs on Australian barley could come as early as next week with Western Australian barley producers, who supply 88 per cent of barley exports to China, to be the hardest hit.
MOFCOM warned on Friday that it was considering proposals for a dumping margin of up to 73.6 per cent and a subsidiary margin of another 6.9 per cent for all barley imported from Australia as a result of a long-running anti-dumping investigation announced in November 2018.
Australia was given 10 days to make a response to the proposal with MOFCOM making a final decision on, or before, May 19.
If imposed at the level suggested by MOFCOM last Friday, it would effectively deal Australia out of the Chinese market, worth about $1.2bn at its peak in 2018.
The news that four Australian meat processing plants have had their import licenses temporarily suspended makes it clear that the warnings in the Global Times about Chinese being prepared to take broader action on its trade with Australia might be coming true.
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