Australian industries spooked by rumours of sweeping China trade ban

Rumours of a multibillion-dollar hit to Australian exports have wine, lobster, copper, sugar, timber and coal industries worried.

Chinese President Xi Jinping. Picture: AFP

China’s Commerce Ministry has downplayed “rumours” of a multibillion-dollar hit to Australian exports that has spooked the wine, lobster, copper, sugar, timber and coal industries.

The mooted trade ban – which would be unprecedentedly wide ranging, even for President Xi Jinping’s administration – was first reported by the South China Morning Post, citing unnamed sources.

It appears to be based on notes of an unusual, and unverified, meeting which have circulated among traders in China.

China’s Ministry of Commerce in Beijing told The Australian they had no knowledge of the meeting that, according to circulated notes, outlined a sweeping ban on trading with Australia.

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

The Australian government, Australian businesses and investors have been scrambling to establish whether the notes of the meeting were authentic.

Miner Sandfire Resources share price fell 6.5 per cent as investors, including short sellers, responded to unconfirmed reports of a trade ban on Australia’s more than $3b-a-year copper exports to China.

Australia’s toxic bilateral relationship with China has created fears of further trade retribution from the world’s second largest economy.

China last year imported a record $149b from Australia and – despite almost nine months of headlines about trade retaliation – is on track to record its second biggest year.

Business people operating in China were reluctant to comment on the unverified meeting, but many were sceptical that reports of it had circulated in the week China was hosting its marquee international trade fair.

Some also noted it was unprecedented for China to so clearly outline a plan for trade retaliation.

Others said, while the meeting may have been fabricated, the message was real.

Circulated notes of the meeting – which was spread widely over Chinese social media platform WeChat – included dates of action, industries targeted and a co-ordinated denial strategy.

A translation of notes of the supposed meeting said the “National bureau of commerce” (an apparent misnaming of the Ministry of Commerce) had ordered that “seven kinds of commodities were not allowed to be imported from Australia”.

The unverified meeting notes listed barley, wine, timber, coal and lobster, all products that have had trouble with Chinese authorities this year. It also included three products yet to be interfered with: sugar, copper and refined copper ore.

The circulated note said that Australian goods that arrived after November 6, this Friday, would be “stuck at ports”.

The unverified account also openly outlined a plan of denial: “Australian companies should be given unified business reasons for the suspension”.

As well as rejecting any involvement with the reported meeting, the Ministry of Commerce told The Australian its trade policy was in line with the Chinese foreign ministry.

At a regular press conference in Beijing on Monday evening, Foreign Ministry spokesman Wang Wenbin said last week’s inspections of Australian lobsters were “in line with pertinent laws and regulations”.

More than $2m of Australian lobster was held up for testing at Shanghai after arriving on Thursday night. Most lobsters were spoiled or dead before they were cleared on Sunday.

The Foreign Ministry spokesman also confirmed a customs notice that last week banned timber from Queensland, citing pests found in some imported logs.

But he did not comment when asked about the South China Morning Post’s report on the mooted ban on imports of Australian copper ore, copper concentrate and sugar.

“We believe a sound and stable China-Australia relationship serves the fundamental interests of both peoples. In the meantime, mutual respect is the foundation and guarantee of practical co-operation between countries,” he said.