Australian exporters rekindle China ties amid diplomatic thaw

A raft of official and unofficial ‘trade blockages’ first imposed by China in 2020 worth roughly US$14 billion are showing signs of loosening

An end to trade restrictions would mark an early success in Australia’s effort to repair trade links with China even as it deepens security ties with the US and UK

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Coal is unloaded on to large piles at the Ulan Coal mines near the central New South Wales rural town of Mudgee in Australia. Photo: Reuters

Published: 4:40am, 27 Feb 2023Updated: 5:14am, 27 Feb 2023

Two and a half years after Chinese trade restrictions hit Australian products from coal to wine, a diplomatic thaw between Beijing and Canberra has raised hopes for a revival of exports and spurred businesses to take steps to rebuild ties.

First imposed by China in 2020 after years of disputes over Huawei, espionage and Covid-19, a raft of official and unofficial “trade blockages” worth roughly A$20 billion (US$14 billion) are showing signs of loosening under a concerted diplomatic effort that has seen the leaders, foreign ministers and trade ministers of both countries meet since November.

Australian business leaders are following the political signals. Fortescue Metals founder Andrew Forrest, BHP head Mike Henry and Tim Ford, chief executive of tariff-hit winemaker Treasury Wine Estate, have scheduled visits to China in March.

Long Dingbin, China’s top diplomat in Western Australia, visits the Geraldton Fishermen’s Co-operative in January. Photo: qq.com

The head of the Australian Forest Products Association said Australian agriculture officials recently started “encouraging” talks with Chinese customs over log imports, once a A$600 million-a-year trade.

“We’re optimistic that in the near future – could be three months, could be six months – we might see a resumption in trade,” the association’s chief executive, Victor Violante, said.

At least 15 vessels carrying Australian coal were bound for China last week as traders bet already-reduced trade barriers will fall further. Chinese cotton buyers are importing Australian product in anticipation an unofficial ban will lift.

An end to trade restrictions would mark an early success in Australia’s effort to repair trade links with China even as it deepens security ties with the United States and United Kingdom through the AUKUS nuclear submarine alliance.

However differences over national security, human rights and other issues mean the journey to refreshed trade relations could be tentative and bumpy. Australia is expected to announce in March further details about the nuclear submarines it plans to buy, a move Beijing opposes.