Beijing backlash to ensure no respite in trade brawl

Australia is preparing for an extended trade assault from China over simmering security and diplomatic tensions.

Trade Minister Simon Birmingham on Friday described threats emanating from China targeting key export markets as ‘predominantly rumours’. Picture: NCA NewsWire / Gary Ramage

Australia is preparing for an ­extended trade assault from China over simmering security and diplomatic tensions, as Beijing pushes back against joint military exercises in the Indo-­Pacific and the federal government’s foreign interference crackdown.

Despite moves by Beijing to ease concerns over a threatened ban on Australian wine, lobster, copper, sugar, timber and coal ­exports from Saturday, the Morrison government remains on high alert for China to continue its disruption campaign targeting trade-reliant industries.

Australia’s participation in ­Exercise Malabar this week alongside US, India and Japan navy vessels — the first time the Royal Australian Navy has been invited since 2007 — seemed to spark the sweeping threats on ­exports worth more than $6bn a year.

Melbourne man Di Sanh Duong was also charged on Thursday with preparing an act of foreign interference under new national security powers, which have been attacked by Chinese ­officials. Mr Duong, who is of Chinese and Vietnamese heritage, is associated with several groups linked to the Chinese Communist Party.

Chinese Foreign Ministry spokesman Wang Wenbin criticised decisions made by Coalition governments in relation to 5G and the rejection of more than 10 China-backed projects.

“Upholding a vision of openness, cooperation, solidarity and mutual benefit, China will stay committed to greater opening up. We act on our words,” he said.

“I noticed that some in Australia have recently been questioning China’s measures, and some even accusing China of violating international trade rules. I’d like to point out that since 2018, more than 10 Chinese investment projects have been rejected by Australia citing ambiguous and unfounded “national security concerns” to ban Chinese companies in its 5G network building and put restrictions in areas like infrastructure, agriculture and animal husbandry.

“So far Australia has launched as many as 106 anti-dumping and anti-subsidy investigations against Chinese products, while China only initiated four investigations against Australian goods. Between China and Australia, which country is breaching the principles of market economy and the bilateral free trade agreement? And which country is reneging on its commitments, undermining cooperation and taking discriminatory measures? The facts are all too clear.”

Mr Wang said “as we underscored repeatedly, mutual respect is the basis and prerequisite for state-to-state cooperation”.

“Once again we urge some in Australia to reflect upon their deeds, do more things that are conducive to mutual trust, cooperation and the China-Australia comprehensive strategic partnership, and create favorable conditions and atmosphere for bilateral practical cooperation across the board.“

As China’s trade threats against Australia escalate, exporters are being told to consider the commercial risk of sending products to China and actively seek ­alternative markets. Austrade is assisting exporters into new markets, with a focus on emerging ­opportunities in the Middle East, South Asia, South America and India.

Under existing and new programs backed by the government, including a $6.6m package in last month’s budget, exporters are being encouraged to lock-in longer-term markets and reconsider their pricing models to ­attract new customers.

Other opportunities through the Trans-Pacific Partnership, free-trade agreements with Japan, Korea, Indonesia and Peru, and looming deals with Britain and the European Union, will be targeted by Austrade to diversify and expand options for Australian exporters.

China currently makes up more than one-third of Australia’s total exports.

Former trade minister Andrew Robb, who engineered the Australian-China free-trade agreement and has ongoing business ties with China, said “everyone says go diversify”. “But most of the countries we’ve been told to diversify to have been smashed by COVID,” he said.

Mr Robb said the bilateral tension needed to be sorted out. ­“Although that’s very hard if they won’t take your call,” he said.

Trade Minister Simon Birmingham on Friday described threats emanating from China targeting key export markets as “predominantly rumours”, following conversations between Australian diplomats with officials in Beijing.

“Chinese authorities have given assurances, both publicly through their media spokespeople, and privately, that there is no concerted action of discrimination against Australia. And we want to make sure that they live up to those commitments,” he said. “We hope and trust that in living up to those commitments, they do so in a manner that continues to facilitate beneficial trade for businesses in China as it is for businesses in Australia.”

Some business people heavily involved in Australia’s $149bn goods export trade to China are sceptical the sweeping ban was ever serious.

“It seems like a guerilla warfare campaign to put the wind up us,” said one, who declined to be named for fear of offending Australia’s biggest trading partner.

In a message posted to China’s social media platforms via Austrade to promote Australian products as part of the China International Import Expo, Senator Birmingham urged Chinese consumers to “enjoy a piece of our fantastic Aussie lifestyle”.

“We know Chinese consumers value our high-quality product, safety and reliability. And in return we value your custom,” he said. “Whether you enjoy Aussie cereals in milk for breakfast, wearing our fashions, benefiting from our health products, or enjoy our entertainment, you can trust that we put quality first.”

In a notice issued to industry on Friday, the Department of Agriculture told exporters they would continue to facilitate market access and “seek to ensure importing country requirements are up to date and accurate”.

West Australian Premier Mark McGowan said he was “very concerned” about Australia-China relations. He said he could be pro-China and pro-America while pointing out there were very few other markets for iron ore.

ADDITIONAL REPORTING: HEIDI HAN