Although Chinese trade sanctions have cost Australian exporters millions of dollars, one expert says the impact of businesses is far from crippling.
Trade to China across the affected commodities, including beef, barley and coal, has dropped by 78 per cent.
After relations between Beijing and Canberra plummeted over the last year, sanctions were imposed on Australian exporters. They came after Australia called for international investigation into the origins of the coronavirus pandemic and the Federal Government introduced foreign interference legislation.
However, Lowy Institute lead economist Roland Rajah said the tariffs and other sanctions against Australian exports started last year amid the COVID-19 pandemic which “significantly clouds the picture.”
The total number of exports in the past few months was about $5.5 billion a year, declining from a totalled $29 billion in 2019.
Mr Rajah says a fair trade of diversion should be expected, “with global trade shuffled around as China replaces Australian imports with other sources and Australian exports shift to other markets, with some impact on prices.”
Beijing’s policy of targeting products helped Australian exporters find alternative buyers for the affected commodities, causing limited effects on its own economy.
Mr Rajah says this global trade reshuffling is the reason the damage inflicted on Australia has been limited.
Despite the success, with the US, EU and UK authorities accusing the Chinese government of repressing Uyghurs and other minority groups over the Xinjiang strains, a landmark investment deal between European Union and China was cast into doubt after officials traded sanctions over Xinjiang.
