Australia has become China’s ‘whipping boy’ as trade bans bite

China is out to punish Australia for provocative moves against the communist superpower, and the retaliations could get much worse, experts say.

 China is treating Australia like its “whipping boy” as punishment for our close ties with the US and calls for an inquiry into the pandemic, academics say.

Chinese officials are reported to have informally told importers of goods, including timber, sugar and barley, that products arriving after Friday will not be cleared by customs.

Academics say China has been put off-side by a number of key Australian government decisions, including Prime Minister Scott Morrison calling in May for an inquiry into the origins of the coronavirus pandemic.

Chinese-owned telecommunications giant Huawei being blocked from rolling out Australia’s 5G network due to security concerns and foreign interference legislation is also a factor.

University of Sydney professor James Curran says it’s hard to know what the circuit breaker will be for Australia-China relations. Picture: University of Sydney

University of Sydney professor James Curran says it’s hard to know what the circuit breaker will be for Australia-China relations.

CHINA’S ‘WHIPPING BOY’

Professor James Curran said the relationship between the two countries had been stripped down to “purely commercial transactions” and would take a long time for the wounds to heal.

The University of Sydney’s Department of History academic said China wanted to treat Australia like a “whipping boy” for getting too close to the US.

“I don’t think there is much we can do about that. I think they are trying to make an example of us,” Professor Curran told NCA NewsWire.

“It’s hard to see where the circuit-breaker is coming from.”

He said the way Turnbull and Morrison governments communicated key decisions made against China, or Chinese businesses or interests, had caused the damage.

“Australia has taken legitimate and necessary steps to counter what it sees as Chinese interference in politics and it has also criticised China over the pandemic and blocked Huawei from access to the 5G network,” he said.

“All of those measures are defensible, but why we have got under China’s skin is because the diplomacy we have used has been clumsy. It lacked guile.”

He said the fractured political relationship between the countries was now on track to cause severe pain for those in export industries.

However, China is yet to strike at the resource sector because of its heavy reliance on one metal.

“I think it’s going to be worth keeping in mind they haven’t turned off the resource tap yet,” he said.

“They haven't tried to hit us on iron ore. They still need that to keep growing.”

University of Sydney Business School professor Hans Hendrischke says China’s bans are a painful political message. Picture: Supplied

University of Sydney Business School professor Hans Hendrischke says China’s bans are a painful political message.

AUSTRALIA MUST HURT

The move has been designed to cause pain, but only on a minor scale and, to a point, that puts the Australian government on notice about its diplomatic ties with the USA, University of Sydney Business School professor Hans Hendrischke says.

He said China’s wanted to send a political message with the export bans, but not disrupt trade across the board.

“The sanctions are not really a global ban. They are trying to hit pain points and illicit some public response to what they see as provocation,” Professor Hendrischke told NCA NewsWire.

“It’s a way to attract public attention and put pressure on the Australian government to come to some kind of political solution.”

China’s bans send a political message to Prime Minister Scott Morrison, who needs to show more tact when making announcements, academics say. Picture: NCA NewsWire/Dylan Coker

China’s bans send a political message to Prime Minister Scott Morrison, who needs to show more tact when making announcements, academics say.

Mr Morrison was accused of “offending the Chinese” by calling for an inquiry into the origins of coronavirus and proposed a model similar to that of weapons inspectors, who can enter a country uninvited to conduct investigations.

Professor Hendrischke said China wanted stable relations with Australia and did not want to affect overall trade, but he warned we may have not seen the end of its retaliation.

“It’s targeted as a political measure, which makes it unpredictable because it could hit another industry and go on,” he said.

“The way I read it is that they want to separate the economic impact, where they do not want to do much harm, but have a political impact.

“They have mentioned the COVID inquiry … and they don't want Australia to work too closely with the States or (be a) flag-carrier for the United States.”

Professor Brent Kaiser, acting director Sydney Institute of Agriculture, says growers need to find new markets. Picture: University of Sydney

Professor Brent Kaiser, acting director Sydney Institute of Agriculture, says growers need to find new markets.

CHEAPER BOOZE

Tariffs on barley, bans on some beef, restrictions on coal and an investigation into wine, which is set to slap taxes on Australian makers, are among a string of trade tactics used by Beijing this year.

With barley on China’s hit list, grain growers are going to have to seek alternative markets or revise their contracts with Chinese buyers, Professor Brent Kaiser says.

The Sydney Institute of Agriculture’s acting director said the fallout from the bans may be felt for years to come but it may lead to cheaper booze in the short term.

“It’s going to free up a lot of barley and see prices go down and I’d imagine and a lot more wine available for sale,” he said.

“I’d imagine the brewing industries being advantaged by this extra barley being available.”

He said barley, under the right conditions, can be kept for up to two years but the real message out of all of this was how each country managed their trade agreements.

“Australian producers and exporters will revisit long-term investment in China and seek opportunities where products can be sold elsewhere, or where existing production can be altered to meet more reliable markets,” he said.

“Australia has a robust, agile and dynamic agricultural industry that trades extremely well on the quality and reliability of its products – this is unquestioned globally.

“Instability with major trading partners can provide opportunities for others to source our markets or in the case of commodities explore options for greater value-added opportunities within Australia.”

Previous Next