China wine investigation is baseless: PM

China is acting with “surgical precision” to inflict maximum damage to the Australian economy without harming its own, an expert says.

China latest tactic in an ongoing trade war with Australia is designed to do maximum damage to the Australian economy without harming its own, an expert says.

Beijing has launched an anti-dumping investigation into wines imported from Australia, which effectively accuses us of flooding China with cheap in an effort to skew the market.

Monash Business School lecturer Dr Giovanni Di Lieto said China was selecting with “surgical precision” various industries that could harm the Australian economy, without causing too much disruption to its own.

“Probably the next item on the agenda for the Chinese government to target is Australia’s dairy industry,” he said.

“On the other hand, iron ore exports are going better than ever before.”

Dr Di Lieto said the investigation could be regarded as payback for past commercial actions.

“Australia is notoriously one of the most active countries in pursuing anti-dumping actions, not only against China but also against other countries in the World Trade Organisation system,” he said.

Dr Di Lieto said Australian industry should diversify its export markets to safeguard against further political turbulence.

Prime Minister Scott Morrison, meanwhile, as denounced the attack on winemakers as baseless, saying Australia had the second highest priced wine in China.

“We totally do not accept any suggestion that there has been any dumping of Australian wine in China, whatsoever,” he said.

“We don’t believe there is any evidence to support that.”

It is the third blow in a matter of months for Australian exporters after tariffs were slapped on barley, and some beef exports were suspended in May.

Relations between Canberra and Beijing soured this year when Australia pushed for an independent inquiry into the coronavirus pandemic.

Mr Morrison said China could be “confident there is no basis against the claims” made by its local wine industry.

But China’s foreign ministry spokesman Zhao Lijian said it was a “normal” investigation.

“The Chinese competent authorities will conduct the investigation in a legal, fair and just manner,” he said.

Chinese Foreign Ministry spokesman Zhao Lijian says a sound and stable China-Australia relationship serves the common interests of both countries, but it calls for the joint efforts of both sides. Picture: Greg Baker/AFP

He said China hoped Australia would do “more things” that were conducive to mutual trust and co-operation between the two nations.

Mr Morrison said China benefited from the high-quality products and services we provided and Australia benefited equally in return.

Independent senator Rex Patrick told Sky News there was no question the investigation was politically motivated.

“It was foreshadowed by the ambassador earlier in the year,” he said.

“The claim that Australian wines are dumping is just ludicrous Australian wines are traded in China on the basis of quality, not price.”

National Party senator Matt Canavan told Today the Chinese Government had been “threatening and bullying” the rest of the world.

“We have to stand up to this and call it out for what it is,” he said.

“Every Australian business must be very wary and careful how they interact with a country that is proving itself not to be trusted.”

Chinese state-owned media outlet the Global Times on Tuesday wrote there “was no reason to politicise the very same remedial measures taken by China aimed at defending its legitimate interests”.

However in another article, it quoted analysts who said the discrimination against technology company Huawei had made Canberra “a clear target for retaliation by Beijing”.

Mr Morrison maintained Australia had not changed its position on China, sovereignty, telecommunications or foreign investment arrangements.