Treasurer Jim Chalmers upbeat on exports to China

Jim Chalmers has flagged a potential easing by Beijing of restrictions on Australian exports.

Treasurer Jim Chalmers with Chinese Finance Minister Liu Kun in India.

Jim Chalmers has flagged a ­potential easing by Beijing of ­restrictions on Australian exports following a face-to-face meeting with Chinese Finance Minister Liu Kun in India.

The Treasurer’s meeting with his Chinese counterpart on the sidelines of the G20 Finance Ministers meeting in Gandhinagar – the first such ministerial contact in four years – comes amid a thawing but still fraught relationship with our largest trading partner.

With both sides emphasising the importance of good bilateral relations, The Australian understands Dr Chalmers said he looked forward to the removal of trade barriers on the exports of goods such as Australian barley, wine, and lobsters.

The two top economic officials discussed recent positive developments, including the resumption of Australian coal exports and the removal of a politically motivated Chinese quarantine on timber logs.

In a statement issued on Tuesday evening after the high-level meeting, Dr Chalmers said “a more stable relationship between Australia and China is in the interests of both nations”.

“This is about re-establishing a dialogue that hasn’t existed for more than four years,” he said.

“I’ve had a productive and promising discussion with my counterpart Liu Kun here in India today. In stabilising our ­relationship, today we made some good progress.”

While emphasising the importance of economic ties, Dr Chalmers also raised deep concerns for two jailed Australians, journalist Cheng Lei and writer Yang Hengjun.

Amid growing concerns in Australia and around the world about a stalling Chinese recovery from extended pandemic lockdowns, the two ministers discussed the challenges facing the global economy.

The meeting followed the release of figures on Monday that showed China’s post-lockdown recovery had faltered, as data showed cooling retail sales drove weaker-than-expected economic growth in the June quarter.

The figures also revealed a deepening property market downturn and a new high in youth unemployment.

In an interview with Bloomberg news, Dr Chalmers said China’s outlook “has a substantial impact on how we see prospects for the global economy”.

“China is obviously a big piece of the puzzle for us and so when the data out of China is a bit softer, that is concerning to us,” he said. “Also, we’ve been monitoring what’s happening in Europe, and we talked about the US. We haven’t revised our forecasts for our economy, but we are monitoring developments in China very, very closely.”

The Reserve Bank board minutes from the July meeting, released on Tuesday, also revealed monetary policy makers were becoming increasingly concerned about growth in the giant Asian country.

“China’s economic recovery had lost some momentum,” the minutes read. “Headwinds to growth in China included persistent weakness in the property sector as well as a weaker outlook for manufactured exports, given slower growth in advanced economies.”

The improving bilateral relationship has been led from the top, with Anthony Albanese meeting Chinese President Xi Jinping at the G20 leaders meeting in Bali last November.

This was followed by visits to Beijing by Foreign Minister Penny Wong just before Christmas, and then by Trade Minister Don Farrell in May.

Defence Minister Richard Marles has also held talks with his Chinese counterpart.

Officials are still hopeful that the Prime Minister will travel to China by the end of this year, although the visit remains in doubt pending further progress on trade barriers and the release of Ms Lei, who has been in detention for nearly three years on espionage charges, the details of which remain secret.

Mr Hengjun has been in detention since January 2019, on similar charges.