Australian agriculture firms brace for Chinese government ‘roadblocks’ and job losses from trade row
- Survey by Australian Chamber of Commerce finds more than 73 per cent of wine industry respondents fear job losses
- AustCham says there are consequences for the relationship from Australia’s decision to review foreign investments on national security grounds
Australian agriculture companies in China are bracing for job losses and “roadblocks” from the Chinese government, as business ties between the two nations sour, according to a new report.
“Our members are fearful of significant job losses to come, particularly from those in the wine industry, as Chinese imports from Australia are curtailed,” said AustCham CEO Nick Coyle in a statement issued alongside the report on Tuesday.
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Beijing has also targeted a number of other Australian agricultural exports, such as beef, citing incorrect labelling and product descriptions on imported products.
Almost half of respondents said it would be either difficult or very difficult to diversify their operations to other countries.
In June, Australian Prime Minister Scott Morrison authorised the country’s Foreign Investment Review Board (FIRB) to review investments on national security grounds.
AustCham said that nearly half its members surveyed disagreed, or strongly disagreed, with Canberra’s increased scrutiny of foreign investments.
Tom Luckock, vice-chair of AustCham China, said he feared a response from Beijing. “There are knock-on effects from FIRB decisions; as FIRB tightens and the relationship deteriorates more roadblocks will be thrown up for Australian companies investing and trading in China,” he said.
Nick Marro, lead analyst on global trade at the Economist Intelligence Unit, said: “I think from a purely trade standpoint, we’re not in a ‘trade war’ scenario. The hostility is all pretty one-sided coming from China. We’re not seeing Australia’s delay, ban or put tariffs on wide swathes of Chinese imports, for example.
“Australia is operating quite differently than the US was, if we think about where we were at the height of the US-China trade war.
“Australia’s moves, like the tightening of FDI [foreign direct investment] rules, have been tinged by a souring perception of China, which is influencing and will continue to guide how these discussions unfold in the future,” Marro said.
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An October poll from Pew Research showed that 81 per cent of Australians had a negative view of China.
“We regret Australia’s request for consultation. It will be handled in accordance with the WTO dispute settlement procedures,” the statement read.
Mining products were Australia’s largest export to China in 2019 at US$71.4 billion, amounting to 68.7 per cent of the country’s export profile, according to China government statistics.
Animal products, including meat, were the second largest category. Australia exported US$11.4 billion of meat and other food products in that year, and US$2.5 billion in beverages, including alcoholic drinks such as wine.
Beijing has denied allegations that China breached its trade commitments. China has questioned if Australia went against its own promises to allow open investment and trade after denying myriad Chinese deals in the past two years, including blocking Huawei Technologies Co from the country’s 5G network.