Chinese stimulus package: How will it impact Australian agriculture?

China’s economy slumped in 2024. Will a massive stimulus package help revive its economy and its Aussie ag appetite?

Trade-exposed Australian dairy and sheepmeat sectors are hopeful a collossal cash injection by Beijing into the Chinese economy will help stimulate demand.

In a move coinciding with 75 years of communist rule, the Xi regime confirmed a sweeping package to underwrite its flailing financial fortunes.

China’s central bank governor Pan Gongsheng announced 800 billion yuan (A$168 billion) stimulus after a year-long slump caused by the faultering Chinese real estate sector, weighing down Australian meat and dairy farmgate prices.

The gigantic yuan figure is about double the March 2020 covid cash package splash directed at the Australian economy by then treasurer Josh Frydenberg.

Meat and Livestock Australia global supply analyst Tim Jackson said lamb and mutton exports were more exposed to the vagaries of Chinese demand than Australian beef.

“What we can say is that it looks like it will come at a good time for Australian sheepmeat production,” he said.

“MLA’s overall sheepmeat production is hitting a record this year of 915,000 tonnes and another record of 924,000 next calendar year.

“For Australia and New Zealand, China is one of the largest sheepmeat export markets. We’ve seen double digit percentage growth in Australian sheepmeat demand from China in recent years — 20 per cent plus growth in the space of a year.”

In May, five major Australian beef operators banned from exporting meat into China had a four-year-long ban lifted by Beijing as trade tensions thawed with Canberra.

“The number of Chinese households making north of A$70,000 is continuing to grow,” Mr Jackson said. “So that stimulus would help stablise or even increase that demand which has been a long-running trend.”

China has been Australian dairy’s largest export market since 2017-18, with demand for cheese and butter sliding from a peak during the 2020-21 covid stockpiling period.

Dairy Australia sustainability manager Charles McElhone said: “It’s early days but demand out of China certainly has been weaker in recent months.

“Per capita consumption of dairy in China is still at relatively low levels — around 35 kilos per capita per year.

“If you look at other nations, for instance Japan are over 80 kilos per capita per year.

“Undoubtedly after covid, there was a lot of stockpiling of milk powder and that’s obviously had a impact on imports in 2023 and 2024.”