Australia-China trade war
Part of Australia-China relations
Date2017/18-present
Location
Australia, China, Taiwan
Caused byAnti-communism, Australia-Taiwan relations, censorship in China, COVID-19 pandemic, Hong Kong national security law, human rights issues, Second Cold War, trade sanctions, Uyghur genocide
MethodsTrade war
Parties
Lead figures

The Australia–China trade war is an ongoing trade war between Australia and China.

The exact date of when the trade war began is debated, however it is understood it began in either 2017 or 2018.[1]

2010s

Tensions between China and the Western world increased in the mid-2010s. China's territorial disputes have been cited as one reason for the tension.[2] The political status of Taiwan and territorial disputes in the South China Sea represent major differences between China and the West. Australia has been a member of the Quadrilateral Security Dialogue, which is widely viewed as an attempt to counter China's influence in the Asia–Pacific.

China escalated its cyberwarfare activities after the election of Donald Trump,[3] including in Australia.[4]

2018

In 2018, the China–United States trade war began to take place.

A political scandal took place in Australia in 2018, which resulted in Australia tightening its foreign political influence laws. The change came after a scandal where Sam Dastyari, who was relatively sympathetic to China's view of its territorial disputes, accepted payments from Chinese donors, leading to his resignation.[5] The scandal resulted in Australia initiating a foreign agent register and a ban on foreign political donations.[6] It has been suggested that the Chinese government perceived the regime as targeting China.[2]

In 2018, Australia banned Chinese telecommunications companies Huawei and ZTE from providing 5G technology for new networks, citing security concerns.[7]

2020

COVID-19 dispute

In early 2020, Prime Minister Scott Morrison endorsed an inquiry into the origins of COVID-19, which angered China.[8] China's ambassador to Australia, Cheng Jingye, warned Australia it was treading a “dangerous” path, and that the Chinese may not wish to consume Australian products.[9]

Following this, China started imposing import tariffs on some Australian exports. China gave a range of reasons for the tariffs, ranging from dumping concerns to bark beetles found in timber. China denied that the tariffs were related to Scott Morrison's call for an independent investigation into the origins of COVID-19.

The tariffs included a wide range of Australian Agricultural products, including barley, beef, cotton, lamb, lobsters, timber and wine. They also included coal, but not iron ore.[10][11]

However, facing international pressure, China agreed in May 2020 to allow a World Health Organization investigation of the origins of COVID-19, which took place in 2021.

Coal

China stopped accepting coal shipments, leaving ships containing hundreds of millions of tonnes of coal stranded on China's coast. In December the government formalised a position to increase coal imports from Mongolia, Russia and Indonesia, in place of Australia's $14B of coal exports to China.[2]

Agricultural tariffs

Agriculture tariffs and market shares are as follows.[12]

2020 China tariffs and affected markets
Product Tariff Value of China market (AUD) Affected market share (% of all exports) Years in place
Barley 80.5% $1 billion ~50% 2020-23
Beef[13][14] (blacklisting of 4 abattoirs) $3 billion (all abattoirs) ~5% 2020-
Wine[15] 206% $1.26 billion ~40% 2020-
Cotton 40% $800 million ~70% 2020-
Lobster[16] (unofficial ban) $771 million ~50% 2020-
Timber (unofficial ban) $1.9 billion ~50% 2020-

At the time, China was Australia's largest agricultural export market, representing 28% of the total.[17] China represented 70% of cotton exports.[18] Agriculture is one Australia's most trade-exposed economic sectors.[19]

The tariffs had a number of impacts on Australian agriculture.[20] Although Australia found alternative markets for barley, such as Saudi Arabia and Mexico, one analyst estimated Australian farmers were losing $30-40 per tonne of barley, with Australian barley substantially cheaper than barley from France or Argentina.[21]

Southeast Asian countries like Singapore and South Korea, along with the UK, increased their imports of Australian wine, but the wine export market lost one third of its value,[15] a loss which continued for years.[22]

Lobsters that previously sold in China for $250 were now selling domestically for $100,[23] with countries like Thailand increasing its imports.

Throughout 2020, China continued to place barriers to Australian trade, including unofficial guidelines to Chinese importers as well as other non-tariff measures such as customs procedures.[24]

War crimes cartoon

In November 2020, Zhao Lijian, Chinese foreign ministry spokesman, tweeted a political cartoon of an Australian soldier holding a bloody knife to the throat of an Afghan child who is holding a lamb, in response to allegations of war crimes committed by Australian soldiers in Afghanistan (some of which were eventually verified and prosecuted). Australia urged China to apologise and for the tweet to be taken down.[25]

2021

China's import restrictions remained in place through 2021. The ban on coal imports erased $1B from Australia's economy. However, due to surging fossil fuel prices and a weaker Australian dollar, Australia's overall resources sector earned more revenue in 2021 than in any previous year.[26]

In April 2021 Cheng Yingye, the Chinese ambassador to Australia, held a press conference at his residence where senior Chinese officials and Uyghur people from Xinjiang appeared virtually to denounce claims of Uyghur genocide, calling them "Western lies” and vowing a "response" by China.[27]

WTO complaint

In June 2021, the Australia commenced discussions with China, centered on its wine tariffs. Due to a lack of progress, Australia requested a World Trade Organization panel to determine whether the tariffs were illegal, which was established in October.[28]

AUKUS, Olympics boycott

In September 2021, China reacted negatively to the announcement of the AUKUS agreement between Australia, the United Kingdom and the United States.[29][30]

In late 2021, China's ambassador to Australia, Cheng Yingye, left his post in Australia.[31] He was replaced in January 2022 by Xiao Qian.[32]

In December, Australia joined the US-led diplomatic boycott of the 2022 Beijing Winter Olympics, which were held in February 2022, based on human rights abuses in China.[33]

2022

In February 2022, a Chinese warship transiting through the Torres Strait shone a military-grade laser at an Australian surveillance plane above the Arafura Sea, inside Australia's exclusive economic zone. This sparked condemnation from Australia.[34] Australia also criticised China for its stance on the Russian invasion of Ukraine.[35]

On 23 May 2022, the Indo-Pacific Economic Framework (IPEF) was formed by US President Joe Biden. The new alliance has 14 members; 13 founding members (Australia, Brunei, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Thailand and Vietnam) and one later entry (Fiji). It is believed that the alliance was formed in response to the security deal between China and the Solomon Islands, which was signed earlier that year. Chinese Foreign Minister Wang Yi heavily criticised the new alliance.[36]

Leading up to the 2022 Australian federal election, China was accused of interfering with the election and with the goal of the Australian Labor Party winning the election and defeating the Liberal-National Coalition.[37][38]

2023

Coal imports restart

In mid-2022, it was reported that China was considering ending its band on coal from Australia.[39][40] On 8 February 2023, a coal shipment from Australia arrived in Zhanjiang, the first in over two years.[41] For the rest of 2023, coal shipments from Australia continued at around 50% of the 2020 levels.[42]

TikTok ban in government

In 2023, TikTok was banned from Australian government devices over concerns about information security.[43]

Wine tariffs

In April 2023 the Australian government agreed to temporarily suspend the WTO action on China's wine import tariffs, pending an expedited review of the tariffs by China,[44] which China announced it would complete in three months, with a possible fourth if needed. In July 2023 the extra month was added to the review timeline.[45]

China ended its barley tariffs in August 2023. A statement from China's Ministry of Commerce said that "in view of the changes in the market situation of barley in China, it is no longer necessary to continue to impose anti-dumping duties and countervailing duties on the imported barley originating in Australia." The Australian government welcomed the decision, crediting the WTO for its role, and expressed hope that the wine tariffs could be resolved similarly.[46]

In October, China agreed to a 5-month review of its wine tariffs, ahead of Prime Minister Anthony Albanese's visit to Beijing.[47]

Barley tariffs

In August 2023, China's barley tariffs ended. From then until December China imported 314,000 tonnes of Australian barley worth $139 million.[48]

See also

References

  1. ↑ "Timeline: The Downward Spiral of China-Australia Relations". Geopolitical Monitor. Retrieved 23 November 2022.
  2. 1 2 3 Karp, Paul (14 December 2020). "China formalises cut to Australian coal imports, state media reports". The Guardian. ISSN 0261-3077. Retrieved 16 December 2023.
  3. ↑ Sabbagh, Dan (23 September 2021). "Experts say China's low-level cyberwar is becoming severe threat". The Guardian. ISSN 0261-3077. Retrieved 22 November 2023.
  4. ↑ "China-based hackers breach Department of Defence technology agency". ABC listen. 28 August 2016. Retrieved 22 November 2023.
  5. ↑ Massola, James (7 September 2016). "Labor senator Sam Dastyari quits over Chinese donations scandal". The Sydney Morning Herald. Retrieved 16 December 2023.
  6. ↑ "Foreign donation ban law clears parliament". SBS News. Retrieved 16 December 2023.
  7. ↑ "Huawei and ZTE handed 5G network ban in Australia". BBC News. Retrieved 23 November 2022.
  8. ↑ "Australia and China spat over coronavirus inquiry deepens". Reuters. 19 May 2020. Retrieved 7 February 2023.
  9. ↑ "China punishes Australia for promoting an inquiry into covid-19". The Economist. ISSN 0013-0613. Retrieved 7 February 2023.
  10. ↑ "Financial Times". ft.com. Retrieved 23 November 2022.
  11. ↑ "China's list of sanctions and tariffs on Australian trade is growing. Here's what has been hit so far – ABC News". amp.abc.net.au. Retrieved 23 November 2022.
  12. ↑ Sullivan, Kath (16 December 2020). "The hit list: Sanctions imposed on Australian trade by China". ABC News. Retrieved 17 July 2023.
  13. ↑ Sullivan, Kath; Honan (12 May 2020). "Government's 'mismanagement' of China relationship to blame for trade woes, Labor says". ABC News. Retrieved 17 July 2023.
  14. ↑ Central, Beef (23 February 2020). "Australia world's highest value beef exporter in 2019". Beef Central. Retrieved 20 July 2023.
  15. 1 2 Hough, Cassandra (29 November 2021). "China stopped buying Australian wine almost overnight. Luckily, these countries saved the industry from complete ruin". ABC News. Retrieved 17 July 2023.
  16. ↑ "Australia's premium rock lobsters find new markets, despite trade and pandemic disruption". SBS News. Retrieved 18 July 2023.
  17. ↑ Hurst, Daniel (28 October 2020). "How much is China's trade war really costing Australia?". The Guardian. ISSN 0261-3077. Retrieved 14 July 2023.
  18. ↑ Hughes, Megan (8 March 2023). "It's another bumper year for cotton despite a wet start. But who is Australia selling to after the China trade ban?". ABC News. Retrieved 14 July 2023.
  19. ↑ "Dollar's decline a mixed blessing". ABC News. Australian Broadcasting Corporation. 15 May 2012. Retrieved 15 May 2012.
  20. ↑ Brann, Matt (22 October 2021). "The true cost of China's barley tariff". ABC News. Retrieved 13 July 2023.
  21. ↑ Brann, Matt (22 October 2021). "The true cost of China's barley tariff". ABC News. Retrieved 14 July 2023.
  22. ↑ Clint, Jasper (14 August 2023). "Chinese tariffs, changing palates see Australia's wine stockpile grow to 2.8b bottles". ABC News. Retrieved 15 August 2023.
  23. ↑ O'Connor (11 December 2020). "Rock lobster sells for bargain price amid China trade woes". ABC News. Retrieved 17 July 2023.
  24. ↑ "Australia-China Trade Tensions: The Great Escape? | S&P Global". spglobal.com. Retrieved 23 November 2022.
  25. ↑ "Australia demands China apologise for posting "repugnant" fake image". BBC News. Retrieved 23 November 2022.
  26. ↑ Turner-Cohen, Alex (20 December 2021). "China's boycott of Aussie iron ore and coal fails after record-breaking earnings". news.com.au.
  27. ↑ Galloway, Anthony (7 April 2021). "'If we are provoked we will respond': China goes on offensive over treatment of Uighurs". The Sydney Morning Herald. Retrieved 21 November 2023.
  28. ↑ DFAT. "Summary of Australia's involvement in disputes currently before the World Trade Organization". Retrieved 15 July 2023.
  29. ↑ "Aukus: UK, US and Australia launch pact to counter China". BBC News. 15 September 2021. Retrieved 21 November 2023.
  30. ↑ "China lashes out at Australia over AUKUS deal". ABC News. 29 September 2021. Retrieved 21 November 2023.
  31. ↑ Galloway, Anthony (28 October 2021). "China's ambassador to Australia is leaving his post". The Sydney Morning Herald. Retrieved 21 November 2023.
  32. ↑ "China's new ambassador says he wants to reset the relationship. Australia's MPs are sceptical". ABC News. 27 January 2022. Retrieved 21 November 2023.
  33. ↑ "2022 Beijing Winter Olympics: Australia joins US diplomatic boycott". BBC News. Retrieved 23 November 2022.
  34. ↑ "Prime Minister accuses Chinese military of 'reckless' intimidation after laser shone at RAAF aircraft". ABC News. 19 February 2022. Retrieved 21 November 2023.
  35. ↑ "'We seek friendship': China's ambassador makes an overture but it's unlikely to sway the government". ABC News. 24 March 2022. Retrieved 21 November 2023.
  36. ↑ "China says Washington's "divisive" Indo-Pacific strategy doomed to fail". South China Morning Post. Retrieved 23 November 2022.
  37. ↑ "Australian premier hints at Chinese interference in upcoming elections". aa.com.tr. Retrieved 23 November 2022.
  38. ↑ "Federal election 2022: China spies attempted to install Labor candidates". amp.smh.com.au. Retrieved 23 November 2022.
  39. ↑ "Why a desperate China has backflipped on Australian coal". ABC News. 17 July 2022. Retrieved 16 December 2023.
  40. ↑ "China mulls ending Australia coal ban on Russia supply fears". Australian Financial Review. 14 July 2022. Retrieved 27 December 2023.
  41. ↑ "Opposition calls for more to be done on trade with China as coal exports resume". ABC News. 8 February 2023. Retrieved 27 December 2023.
  42. ↑ Basu roy, Srija (29 August 2023). "Australian coal supplies to China unlikely to reach pre-ban levels in 2023". S&P Global. Retrieved 27 December 2023.
  43. ↑ "'We have to wake up as a country': Is TikTok really dangerous enough to warrant a government ban?". ABC News. 4 April 2023. Retrieved 21 November 2023.
  44. ↑ Dziedzic, Stephen (11 April 2023). "Australia suspending WTO action after China promises 'expedited review' of barley tariffs". ABC News. Retrieved 14 July 2023.
  45. ↑ Hurst, Daniel; affairs, Daniel Hurst Foreign; correspondent, defence (11 July 2023). "China delays decision on Australian barley tariffs in setback on resolving trade disputes". The Guardian. ISSN 0261-3077. Retrieved 17 July 2023.
  46. ↑ Sullivan, Kath (4 August 2023). "China ditches Australian barley tariffs after long-running trade war". ABC News. Retrieved 5 August 2023.
  47. ↑ "China agrees to review tariffs on Australian wine ahead of PM's visit to Beijing". ABC News. 21 October 2023. Retrieved 16 December 2023.
  48. ↑ "China's appetite for Australian barley is back, three years after tariffs halted the market". ABC News. 30 December 2023. Retrieved 31 December 2023.
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