China ups trade ante with new timber ban

China has escalated its trade assault on regional Australia, banning Victoria’s $260m timber trade and leaving the state’s forestry industry in despair.

Portland resident Andrew Galloway says he fears for friends in timber and related industries, which employ about 100,000 people in Australia. Picture: Damian Goodman

China has escalated its trade assault on regional Australia, banning Victoria’s $260m timber trade and leaving the state’s forestry industry in despair.

At least two shipments expected to depart this week from Portland, a city of 10,000 in the state’s west, have been cancelled after Chinese authorities said a pest known as bark beetle had been detected in earlier cargo.

Portland locals fear the suspension is the latest instalment in China’s sweeping trade retaliation campaign, a fortnight after Queensland timber was banned and as restrictions on wine and lobster exports loom.

“We’re collateral damage in the whole thing,” Port of Portland chief executive Greg Tremewen told The Australian.

“The view from the industry is this a government relations issue, not a biosecurity issue.”

Timber from Portland is almost entirely exported to China.

The latest ban precipitated a crisis meeting with the federal government on Thursday — discussions that left many of the businesses unimpressed.

Assistant Forestry Minister Jonathon Duniam told members of the logging, ports, stevedoring and trucking industries that the government was dealing with Chinese officials over the ban.

Senator Duniam said the shipment pause was because of the discovery of bark beetles and not a more significant trade issue, according to those on the call.

The ban comes after a week of uncertainty over a potential sweeping halt in exports worth more than $6bn a year, a move reported in Chinese media but dismissed by Beijing as a “rumour”.

An investigation by Chinese authorities into Australia’s $1.2bn wine industry could conclude as early as next week, potentially introducing 200 per cent tariffs.

Portland resident Andrew Galloway said he feared for friends in timber and related industries, which employ about 100,000 workers in Australia.

“It’s one of the last industries where good old Aussies who haven’t got a college degree can actually get a job,” Mr Galloway, who has worked in the industry for years, said.

“There’s going to be a lot of people scratching their heads wondering what do I do next.”

Portland and regional towns over the South Australian border have already been hit by the halt of Australia’s $700m lobster trade to China.

On Thursday, Daniel Andrews said it was important to treat China with “respect and mutual understanding”.

“If you don’t treat them properly, if you don’t value that important trading relationship, then they won’t be your biggest customer for very long,” the Victorian Premier said.

Agricultural Minister David Littleproud warned against “going down the rumour track”, saying there was “some credence” to claims by China’s Customs officials.

The deputy Nationals leader said there appeared to have been fumigation problems with logs affected by Victoria’s bushfires: “We’ve always said we’ll take this case by case, and commodity by commodity.”

In a notice released on Thursday, China’s Customs officials said the bugs were identified in Victorian logs shipped to Xiamen and Shenzhen, two cities in the country’s south.

An investigation into the suspension, undertaken by Australian authorities, is expected to take four weeks.

Michael O’Connor, the CFMEU manufacturing national secretary, said China was targeting industries in rural areas using non-tariff barriers.

“I support our country not being bullied … but surely there’s a big gap between being bullied and doing nothing.”

China’s foreign affairs spokesman Wang Wenbin said the decision by China’s customs officials to ban Victorian timber was “science-based” and in line with Chinese laws and international practices.

“They are what must be done to protect China’s domestic industries and consumers,” Mr Wang said at a daily press briefing in Beijing on Thursday.

The foreign ministry spokesman said the reason China-Australia relations were strained was “very clear”.

Mr Wang said the Australian government had repeatedly “spoken and acted out of turn” on Hong Kong, Xinjiang and Taiwan, had accused China of engaging in “so-called ‘intervention and infiltration activities’ in Australia”, and created barriers to “normal exchanges and cooperation” between the two countries.

“In order to get out of the predicament, the key lies in Australia facing squarely the crux of the current setback, looking at China and China’s development objectively and rationally, handling bilateral relations in accordance with the principles of mutual respect and equal treatment, and doing more things conducive to enhancing mutual trust and promoting pragmatic cooperation between the two countries,” the foreign ministry spokesman said.

“Let him who tied the bell on the tiger take it off,” he said.