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China strikes out at Australia with trade threats as its own economy falters

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By Robin Bromby - 
China Australia trade threats war economy falters meat dairy barley tariff steel import ban

China’s beef import bans and tariff threats on Australian barley follows earlier warnings the country will boycott Australian wine, tourism and education if Canberra continues pressing for a probe into China’s handling of COVID-19.


China has imposed an import ban on four Australian abattoirs and is threatening to put an 80% tariff on Australian barley entering the country.

This follows Beijing’s ambassador Cheng Jingye’s warnings that his country will boycott our beef, wine, tourism and education institutions if Canberra keeps pressing for an international probe into the origins of the COVID-19 pandemic.

And there are now reports that the dairy industry is seeking urgent talks with the federal government, fearing that they are next on Beijing’s list.

Yet, no doubt to the surprise of many, on Tuesday, Australian trade minister Simon Birmingham said China’s threats were not retaliation for Australia’s demand for an inquiry into China’s handling of the virus.

However, Australian newspaper headlines are starting to include the words like “trade war” when discussing China-Australia relations (or the decline of them).

China, in imposing punitive measures on meat and barley exporters, cites “technical issues” or “subsidies” as justification for the moves — but when they follow so closely on warnings by various Chinese figures about boycotts, the timing of technicalities seems rather transparent.

At the same time, Chinese GDP figures have slumped, imports shrivelled, and factory prices fallen the most in four years – all indicating the pandemic has sent a shockwave through the Chinese economy.

While Australia seems to be wearing the brunt of China’s fury as Beijing rebuffs criticism over its delays in admitting the virus existed, this country is not alone in in feeling Beijing’s wrath for — in the Chinese new world view — stepping out of line.

China closes off 35% Australian beef exports, much of our barley

Four abattoirs that export red meat products to China have been banned from shipping any further consignments to the country.

The output from the three Queensland meatworks (Kilroy Pastoral, JBS Beef City and Dinmore) and the Northern Co-operative Meatworks at Casino, NSW, had up until now accounted for 35% of Australian beef exports to China.

Based on expectations of meat exports to China this year, that would represent a loss to Australia of $1.2 billion (although other suppliers here may fill some of the shortfall).

Meanwhile, the punitive tariff proposed to be placed on barley threatens to deprive Australia of another $1.5 billion in export income.

It would be a particularly bitter blow for Western Australia, the country’s biggest barley grower.

There could be more to come: ambassador Mr Jingye last month also mentioned wine, tourism and education as areas that his country would boycott if we did not give up demands for a virus investigation, boycotts that would inflict a staggering blow to the Australian economy.

And the story went around the world when Hu Xijin, editor-in-chief of China’s state-owned Global Times newspaper, likened Australia to “chewing gum stuck on the sole of China’s shoes. Sometimes you have to find a stone to rub it off”.

NZ, Europe also in China firing line

Meanwhile, also this week, China has attacked New Zealand after Wellington’s foreign minister Winston Peters called for Taiwan to be allowed to attend World Health Organisation meetings to share insights to its great success in limiting coronavirus deaths to just six.

Chinese foreign ministry spokesman Zhao Lijian told Mr Peters, in language that was clear, to mind his own business.

Mr Zhao told a press conference that China “deplores and opposes” New Zealand’s position, and “no one should entertain any illusion when it comes to matters concerning China’s core interests”.

“We hope that certain people in New Zealand will stop spreading rumours and creating trouble and work to enhance instead of undermining bilateral mutual trust and cooperation,” he added.

China is not mincing its words these days as it mounts a massive propaganda war clearly aimed at diverting the world’s attention from what happened in Wuhan — to the extent that Beijing put out stories that “infected” members of a US military sports team visiting Wuhan for an event last October went to the now notorious wet markets in that city and they were the ones who brought in the virus into China.

One US report summed it succinctly: China is clearly taking a bellicose, sometimes threatening, approach to countries that are critical of its response to the coronavirus.

Beijing has pressured European Union officials to tone down or outright remove language describing China’s official statement on the handling of the virus as “disinformation”.

The clampdown on Hong Kong and the thinly veiled threats that Taiwan could be invaded at any time, reveal a worrying state of mind among the Chinese rulers as they look for scapegoats after the loss of face from the virus outbreak.

Chinese economy showing signs of strain

This week we saw that, in April, China’s factory prices fell at the sharpest rate in four years.

This indicated weakening industrial demand in the world’s second-largest economy as the coronavirus pandemic took global growth down with it.

The producer price index (PPI) fell 3.1% from a year earlier, the National Bureau of Statistics said.

This was one of various indicators of economic problems facing Beijing, from the decline by 6.8% of Chinese GDP in the March quarter, to the 14.2% fall in Chinese imports [imports] in April, and even down to the fact that March saw Chinese steel mills used 43% less ferroniobium than they did at the same time in 2019.

The virus, meanwhile, has motivated Japan to offer incentives for its companies to close their Chinese plans and relocate back home.

Similarly, the European Union has also been talking more about relocating strategic industries back on the Continent.