Coronavirus: Bipartisan call to separate economic issues from virus concerns

Australia must separate its concerns over China’s handling of the coronavirus crisis from its economic relationship with the Asian superpower.

Trade Minister Simon Birmingham says businesses here and in China need to be given space to continue trading while discussions over the coronavirus were had through other channels. Picture: Lawrence Pinder

Australia must separate its concerns over China’s handling of the coronavirus crisis from its economic relationship with the Asian superpower, Trade Minister Simon Birmingham and his Labor counterpart, Madeleine King, have warned.

The bipartisan push to remain open to Chinese trade comes as calls grow for Australia to significantly reduce trade with Beijing because of the latter’s lack of transparency over the origins of the disease and Foreign Minister Marise Payne’s push for an independent global review of the communist regime’s role in COVID-19.

Despite China’s first GDP contraction in 28 years, Chinese demand for Australian resources is expected to remain high and may help boost the nation’s economy post-pandemic.

Senator Birmingham told The Australian that businesses here and in China needed to be given space to continue trading while discussions over the coronavirus were had through other channels.

“Australia and our government have very successfully managed to pursue an open and honest relationship with China about areas of concern … while still allowing Australian businesses and Chinese businesses to get on with their job of commerce and business,” he said.

“It’s important that we don’t seek to make life harder for our businesses and our people, or ­Chinese businesses and Chinese people, as governments rightly get on with discussing and sometimes disagreeing over important policy matters.”

Senator Birmingham’s strong defence of Chinese trade comes as other Western nations are reconsidering their economic connections to the Asian superpower.

Britain’s acting Prime Minister, Dominic Raab, said last week it could not be “business as usual” with China, and US President Don­ald Trump has ramped up his attacks on Beijing.

Ms King, the opposition trade spokeswoman, said Australia was in a different and closer position to China economically than many other Western nations.

“The trading relationship between China and Australia … is even more significant from a Western Australian perspective.

“We not only want but need a strong trading relationship,” she said. “We will always have our differences but that doesn’t mean we don’t do everything in the meantime to keep those people-to-­people, business-to-business contacts going and keep those international supply chains open.

“It is a different relationship than China has with Britain and similar countries. We’re closer to China and we’re dealing with much larger trade volumes. And that relationship has not just been led by government — it has been business-led.”

Prices of Australia’s key commodities have tumbled in the weeks following the announcement of the pandemic, but strong iron ore prices in particular suggest Chinese demand remains strong. Iron ore prices are currently above $US80 a tonne in the June quarter, above the $US55 a tonne factored into last year’s federal budget for this period.

ANU professor of economics Warwick McKibbin said open trade and Chinese demand would ultimately power any possible recovery from a COVID-19-induced recession in Australia. “There will be a hit from Chinese demand for Australian tourism and education but demand for resources should remain quite strong,” he said.

“The biggest mistake we could make is to revert to protectionism. The lesson here is diversification where we can. We make massive gains from trade and we don’t want to give that away.”

The Morrison government is still facing pressure from within its ranks to make a bigger economic break from China once the pandemic passes. Former Pacific minister Concetta Fierravanti-Wells said Australia should “decouple” from China economically.

“With 26.4 per cent of Australia’s two-way trade with communist China, we have too many eggs in the one basket. This compares with Japan (9.9 per cent) and the US (8.6 per cent),” she said.