Business buoyed by Xi Jinping meeting but diversity key

Business groups say they’re increasingly hopeful China will ease tariffs on Australian exports following Anthony Albanese’s first meeting with Xi Jinping.

Anthony Albanese with Chinese President Xi Jinping at the G20 in Bali on Tuesday. Picture: AAP

Business groups say they’re increasingly hopeful China will ease tariffs on Australian exports following Anthony Albanese’s first meeting with Xi Jinping, but emphasise the need to continue finding new markets amid ongoing geopolitical tensions.

Business Council of Australia chief executive Jennifer Westacott said ending the stalemate between Australia and China sent a really positive signal to business and marked the first step towards building a stronger relationship.

Scott Morrison had a “pull aside” chat with Mr Xi at the 2019 G20 but the last official bilateral was in 2016, when Malcolm Turnbull was prime minister.

While the BCA holds a longstanding view that Australia’s economy is too narrow and business needs to diversify, Ms Westacott said: “The crucial thing … is it’s not about not doing things in China, it’s about doing things in places as well as China and deepening those relationships.

“We’ve got to have realistic expectations of how fast that can happen – very little will happen without dialogue so starting that is the breakthrough moment.”

Australian Industry Group chief executive Innes Willox said it was highly unlikely the Australia-China relationship would regain its former momentum and any time soon.

“Even though China remains an important economic partner, much of Australian industry found new markets and new sources of supply as the relationship deteriorated,” he said.

“However, industry strongly hopes Tuesday’s meeting can provide a platform for ongoing political dialogue that over time opens the way for a more stable economic and business relationship between our countries.”

Two-way trade between Australia and China soared to more than $200bn before being hit by a series of tariffs and non-tariff barriers against exports of Australian wine, barley, coal, lobsters and beef worth more than $20bn a year. Services exports also reduced during Covid-19.

Australian Chamber of Commerce and Industry chief executive Andrew McKellar said the Albanese-Xi meeting sparked optimism among affected industries that market access would be restored in the near term. “At the same time, nobody is losing sight of the fact we need to continue to work on other opportunities. We need to diversify,” he said.

Tourism and Transport Forum chief executive Margy Osmond was optimistic the meeting would see Chinese visitors returning sooner than anticipated, as ANZ research showed short-term arrivals from China were down more than 90 per cent compared with pre-Covid levels.

She said she believed the number of Chinese tourists would bounce back but cautioned businesses were now operating in the “most competitive tourism market the world has ever seen”.

National Farmers Federation president Tony Mahar said farmers did not expect an immediate resolution to the trade disputes but urged Mr Albanese to seek more meetings to ensure China wound back tariffs on Australian products: “China takes a quarter of our exports so it is a very … important market and we want to see resumption of a strong and mutu­ally beneficial relationship.”