WA Premier Mark McGowan continues attack over China ties
WA Premier Mark McGowan is continuing his attack on Canberra’s handling of China, telling a business summit diplomacy doesn’t mean kowtowing.
West Australian Premier Mark McGowan has blasted the Morrison government for increasing trade tensions with China and called for a reset of the relationship to ensure exports remain strong.
WA is a major supplier of iron ore and LNG to China but cracks have started to appear after Woodside Petroleum revealed earlier this year the trade rift had derailed an equity selldown and LNG sales between the two nations.
Reports emerged in May that several Chinese importers have been told to avoid buying supplies of gas from Australia.
“The federal talk of conflict, trade retaliation can and must stop. We should always protect our interests, our institutions, our independence, our democracy and our freedoms. That goes without saying. But how is it in our interests to be reckless with trading relationships that fund and drive our prosperity and our nation forward,” Mr McGowan told the Appea oil and gas conference in Perth on Tuesday.
“This isn’t about kowtowing to other countries and giving in. It’s about having a bit of tact and a bit of savvy. It’s what was commonly known as diplomacy. It’s not beyond us as Australians to do that in our national interest. There needs to be a national reset in that relationship.”
China is the joint largest export market for Australian LNG, supplying 45 per cent of Beijing’s needs.
Resources Minister Keith Pitt said he was focused on diversifying export options for Australia’s LNG producers noting a $20m global resources strategy to diversify export markets and build trade shock resilience.
“All of your readers will recognise what some of those challenges are but I won’t be apologising for taking a strong position in terms of Australia’s national interest and our sovereignty as you would expect of any federal government,” Mr Pitt told The Australian. “We will continue to work with our trading partners to have a strong and supportive relationship with them around exports out of Australia. I’ve very happy to have a meeting with my counterpart at any time they might wish one.”
Woodside in February said it had been forced to postpone talks to sell LNG to China, the world’s biggest gas buyer, blaming an economic rift between Canberra and Beijing that has forced Australia’s largest LNG producer to find alternative markets.
That move ratcheted up the economic fallout between the nations after potential Chinese buyers pulled out of a deal in November to acquire a stake in the energy producer’s $16bn Scarborough gas project.
Santos - whose biggest shareholder is China’s ENN with a 10 per cent stake - said the industry wanted stable trading relationships with its large buyers.
“I understand that from time to time there will be tensions between governments of all nations,” chief executive Kevin Gallagher said. “We try not to be too dependent on one customer or one company or one country for a number of different reasons.”
“Some other operators have said they have had some difficulties. We haven’t experienced that yet.”
Beijing has an unofficial ban on Australian coal while LNG has also started to be targeted by smaller Chinese buyers, a further setback from a trade spat which has also seen wine, barley, beef, wheat, lobsters, and cotton all targeted in the last year.
Still, the bulk of Australia’s LNG exports to Chinese giants including CNOOC, Sinopec and PetroChina are unlikely to be caught up in the diplomatic sniping, according to consultancy EnergyQuest.
The reporter travelled to Perth as a guest of Appea