After years in Beijing’s crosshairs, Australian farmers flock back to China

Seven years after being thrown into Beijing’s freezer, a group of Australian farmers is on the cusp of what remains one of the greatest prizes for our $80bn agricultural export sector: access to China’s enormous market.

Seven years after being thrown into Beijing’s freezer, a group of Australian farmers is on the cusp of what remains one of the greatest prizes for our $80bn agricultural export sector: access to China’s enormous market.

The Australian can reveal behind-the-scenes negotiations between Australian and Chinese officials that began after Prime Minister Anthony Albanese’s trip to China last November have reached an agreement for Australian apple farmers to get market access to the world’s second-biggest economy.

Sources familiar with the process said the Chinese market access win – which would be the first in almost a decade – is expected to be unveiled at the China International Import Expo in November.

It will raise hopes across the agricultural export sector, which remains lured by a market so big many are willing to tolerate the obvious political risks.

Australia’s Department of Agriculture, Fisheries and Forestry declined to comment, but a source in the Australian government familiar with the negotiations confirmed “good progress” had been made.

The Chinese embassy in Canberra declined to comment, as did the Australian apple industry’s peak association, APAL. People familiar with the situation said there remained a concern the deal – which was first discussed in 2017 – could be further delayed by turbulence in the bilateral relationship ahead of the mooted November announcement.

“We worry about that,” said a source in a China-focused pocket of Australian agriculture, speaking anonymously because of the political sensitivity.

“(China) might still pull the pin,” said the source, noting that in recent years many Australian farmers had been turned into “roadkill” as Beijing tried to put pressure on Canberra.

Prime Minister Anthony Albanese and Trade Minister Don Farrell at the China International Import Expo in Shanghai in November 2023.

Even after years of trade strikes, China remains by far Australia’s largest agricultural export market, with sales worth about $17bn in 2022-23. Japan is in second place at about $5bn.

Despite being on the brunt of Beijing’s sweeping economic coercion campaign, in recent weeks China has been crawling with Australian farmers, fishers and winemakers.

Australia’s avocado industry is energetically lobbying to join blueberries as the next in line in the queue for market access negotiations between Australian and Chinese officials.

A fortnight ago, a delegation from Avocados Australia, the industry’s peak advocacy group, met with Chinese government officials in Yunnan, in China’s southwest, and major Chinese food importers in Shenzhen, as they try to build relations with key stakeholders in the market.

Analysis by the avocado industry estimates access to China could more than triple the size of their total export trade from less than $100m to more than $300m. “It would be an absolute game changer,” Avocados Australia chief executive John Tyas said.

Avocados Australia CEO John Tyas, left, leads a delegation to Yunnan in China’s southwest to meet with Chinese stakeholders.

The blueberry industry’s peak body, Berries Australia, was also in China in recent weeks, doing due diligence on a market it has been trying to get into for almost a decade.

Berries Australia executive director Rachel Mackenzie told The Australian the opportunity for the sector’s premium blueberries was “significant”.

Australian truffle, pear and carrot farmers have also pitched to get access to China.

A delegation from Seafood Industry Australia was also in China, lobbying for an end to the black-listing of Australian live lobsters, and shoring up ongoing trade in other seafood products.

The live lobster ban has been devastating for an industry that previously sold more than 95 per cent of their catch to China, a market that will pay almost twice as much for live lobsters than anywhere else in the world. ANU research fellow Benjamin Herscovitch has estimated that China’s live lobster ban has cost the Australian industry almost $2bn since 2020.

Seafood Industry Australia chief executive Veronica Papacosta, fourth from left, meets the Shanghai Fisheries Association during a recent trip to China.

Seafood Industry Australia chief executive Veronica Papacosta declined to comment on her meetings, but sources familiar with the discussions told The Australian the outlook remained opaque.

Canberra has made ending the lobster ban a top trade priority since the tariffs on Australian wine were removed this year. The Australian government’s trade body Austrade recently hosted an exclusive dinner in Shanghai for the visiting Seafood Industry Australia delegation and about 45 of their most commercially important Chinese customers.

Australian bluefin tuna, oysters, abalone, prawns and of course lobster were all on a menu prepared by Chinese celebrity chef Johnny Gu.

Celebrity chef Johnny Gu’s team carve an Australian southern bluefin tuna for guests at Austrade’s VIP seafood dinner in Shanghai.

The Australian agricultural offensive into China seems to have bipartisan political support. After years of focus on “diversification”, the government and opposition have this year each tried to outdo the other in their ambition for the future of trade ties with China, which has given heartburn to some in the national security community.

Trade Minister Don Farrell, who will give a keynote address at this week’s Australian China Business Council annual networking event in Canberra, has spoken bullishly about growing Australia’s already record two-way trade with China by another $100bn to $400bn.

Opposition Leader Peter Dutton, who will also give key a keynote address at the ACBC event, went even further, saying he would “love to see” the trading relationship increase “two-fold” to $600bn.

Berries Australia executive director Rachel Mackenzie and Driscoll’s Jae Chun at AustCham Shanghai’s gala dinner.

For all of Beijing’s claims to the contrary, Australian produce never stopped being popular with consumers in China’s wealthiest cities during the Turnbull and Morrison governments.

Li Zhe, a nurse in Beijing, said her family switched to milk from Australian producer Devondale years ago. Anger from China’s government over Canberra’s call for an inquiry into the origins of Covid or its Huawei ban did not change her family’s dairy preferences.

“It’s become a daily necessity at our home,” she said.

Australia’s strict food and health regulations are highly prized in a market that is often rocked by food-quality scandals. Produce sourced from Australia is proudly displayed on up-market cafe and restaurant menus in Beijing and Shanghai.

The ongoing appeal of “brand Australia” partly explained the buoyant mood among many of the 400-odd attendees at a sold-out gala dinner on August 30 to celebrate the Australian business chamber AustCham Shanghai’s 30th anniversary.

Chinese officials who addressed the event underlined the improvement in the bilateral relationship, a welcome signal for the Australian business crowd in attendance.

AustCham Shanghai’s 30th anniversary gala in Shanghai

“The future is bright,” AustCham Shanghai chair Heidi Dugan said. As with most international business chambers in China, AustCham Shanghai’s membership numbers fell significantly during the pandemic, but they are growing again. “Give us another year and we will either be the same as we were or higher. That’s our goal,” Ms Dugan said.

Many Australian agricultural businesses continue to thrive even as China’s annual economic growth has slowed to about 5 per cent, according to its official numbers.

While China’s restaurant spending has plummeted, some segments of the food and beverage sector, particularly those focused on health and wellbeing, continue to grow.

Avocado consumption is soaring, driven in part by a growing trend of Chinese mothers feeding it to their babies as a health food.

“It’s an enormous, enormous opportunity,” Mr Tyas, the head of Avocados Australia, said.

Australia’s consul general in Shanghai John Williams with AustCham Shanghai chair Heidi Dugan at the business chamber’s gala dinner.

The industry is alert to concerns in Canberra about farmers becoming too dependent on the China. Mr Tyas noted that in the avocado industry’s case, entering China is diversification.

They already export to Southeast Asia, Hong Kong, Japan and India, but not China, which last year overtook Japan as Asia’s biggest avocado importer.

“We won’t put all our eggs into one market,” he said.

Australian exporters to China have said they are well aware that in the years to come they could again get caught in the crosshairs of an angry Beijing. Right now, the Chinese government’s proclivity for tit-for-tat and politically motivated trade strikes looks to be creating opportunities for Australian farmers, a welcome change after their experience since 2020.

Beijing’s threats to impose tariffs on European and Canadian agricultural exporters.

“Geopolitics is the new normal for Australian business here,” said Vaughn Barber, the chairman of AustCham Beijing.