"You started it, no you started it, no you did".

The ongoing spat causing a slump in relations between the two countries with China using agricultural as it’s preferred weapon of warfare. Not necessary in chronological order, here’s how it’s gone so far:

  • AU calls for a probe into China’s dumping of steel, aluminium and A4 paper
  • AU calls for an independent investigation of covid origins, seemingly in support of the US
    in retaliation China slaps a 80.5% anti dumping tariff on the $180m AU barley trade, causing many WA farmers to transition to wheat
  • this is followed up with a ban on four AU abattoirs amid covid concerns
  • Australia’s Foreign Relations bill is drafted (going through in Sept) giving power to the federal government to veto any foreign deals undertaken by universities and state governments that are “deemed not in the nations interest” – there are 42 deals being looked at, 27 of which are with China
  • China pulls out of a deal to buy Lion Dairy (dairy and drinks company) for $340m on the basis of the AU government indicating it will be unlikely to support the deal
  • China, the largest importer of Aussie wine @ $1.1b, launches a probe into dumping allegations
  • a fifth Aussie abattoir is suspended

At a recent address in Canberra, the senior Chinese diplomat to Australia laid the blame at the feet of the Australian government saying:

  • it is the will of China to maintain strong diplomatic ties with Australia
  • he also said you should not interfere in China’s internal policy – a reference to Hong Kong and China’s moves in the South China seas
  • followed up with the call for a probe into covid’s origins has caused considerable distress and harm amongst the Chinese people.

Clearly his boss isn’t happy and the covid call is an infectious thorn in their side, but China takes one third of Aussie agri exports, trade which has increased 300% in the past 10 years, so the reliance on the appetites of the 1.4b Chinese is becoming troublesome. Fact is though, exporters are less interested in politics and will always to take the best deal on offer at the time, and why not. Seems to me farmers live with enough market uncertainty now without trade wars but food is a major weapon of warfare.

So while NZ continues to walk the diplomatic tightrope, Australia is exploring a trilateral trade agreement with India and Japan in an effort to decrease their trade dependence on China, and reduce their influence.

Tracta | Champions of Agribusiness - Rural Specialist

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