Australian exports to China down by 26pc, worse than any other country

Australia’s goods exports to China fell by more than 26 per cent in August, taking total exports down by 7.5 per cent over the year.

The latest monthly figures from China show that imports from Australia were down by more than any other country in August. Picture: AFP

Australia’s goods exports to China fell by more than 26 per cent in August, taking total exports down by 7.5 per cent over the year to $US75.7bn ($103.9bn), according to figures from the Customs General Administration in Beijing.

The latest monthly figures from China show that imports from Australia were down by more than any other country in August. The figures, reported by Bloomberg and based on the latest Chinese customs data out on Monday, can vary from Australian Bureau of Statistics numbers.

Chinese imports from Australia in August were down by 26.2 per cent to $US8.81bn year on year in a month where total imports by China were down by 0.5 per cent.

The numbers from Beijing come after data from the ABS showed that Australian goods exports to China in July were down by 16 per cent in July on a year-on-year basis with a fall in exports of iron ore and coal.

This was a turnaround from four months of strong export sales to China from March to June.

China’s official figures show that its imports from Australia were only down by 7.2 per cent in July, which could reflect delays in timing between the two countries as well as exchange rate movements.

While analysts are wary of making too much of one month’s trade figures, the Australia-China trade figures are being watched closely for any sign that worsening political tensions between Australia and China will be reflected in exports to Australia’s largest trading partner.

Australian Bureau of Statistics figures have shown that Australian exports to China were holding up strongly from March to June after a slow start to the year due to the impact of Cyclone Damien in Western Australia on iron ore supplies.

ABS figures show that Australian exports of goods to China for the financial year ended June 2020 rose to a record $150bn, compared to $135bn in the year to June 2019, as a result of strong iron ore prices and record sales of beef and wine.

Iron ore is the biggest single source of Australian exports to China, making up 56 per cent of all goods exports in the 2019-20 financial year.

Falls in July and August in figures from Australian and Chinese sources now show a short-term downturn in trade.

The figures do not include Australian trade in services to China, which has been hit hard as travel restrictions have prevent the movement of tourists and students from China. The figures from Beijing, which do not break down the statistics by industry, show a weakening picture for goods imported from Australia for most of 2020, with imports down on a year-on-year basis every month except March.

China hit Australia’s barley imports with a tariff of up to 80 per cent earlier this year, and recently announced anti-dumping and anti-subsidy investigations into imports of Australian wine.

While the inquiry into Australian wine could take as long as 18 months, there have been fears that news of the investigation could hit exports earlier as Chinese buyers may choose to cut back their purchases of Australian wine due to fears of price increases in the longer term.

Australian sales of beef to China have been strong in the first half of the year but were hit in July with an increase in tariffs from less than 5 per cent to 12 per cent as total beef sales hit tariff trigger levels set under the China-Australia Free Trade Agreement.

Monday’s figures show that China’s trade with Canada, where China is involved in a bitter political dispute over the arrest of senior Huawei executive Meng Wenzhou in December 2018, were down by 27.4 per cent over the year to $US14.2bn. Monday’s figures from Beijing show China’s imports from Brazil — Australia’s great rival in the supply of iron ore — were up by 21.1 per cent in August and 5.5 per cent over the year to $US54.5bn.

Australia’s relations with China have continued to hit new lows this year with Chinese anger over Australia’s calls for an inquiry into the origins of the coronavirus, federal government rejection of a takeover bid for the dairy and drinks business of Japanese-owned Lion by a Chinese company and the moves by the federal government to block deals between Australian states and foreign governments including Victoria’s support for China’s Belt and Road Initiative.

Last week’s arrest of Chinese-Australian journalist Cheng Lei in Beijing has also sent shockwaves through the Australian expat community in China, raising fears about travel by Australians to the country in future even when COVID restrictions are lifted.