Winemakers confirm China’s red tape blockade

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Via The Australian:

McWilliam’s Wine chief executive Jeff McWilliam has confirmed widespread reports from the nation’s $40 billion wine industry that a ‘‘go slow’’ at Chinese ports, possibly politically motivated, is restricting the flow of Australian wine into its most important export market.

Mr McWilliam said it appeared much of the slowdown in shipments of Australian wine through key ports was being caused by Chinese customs officials requiring changes to the supply of documents and the way these export papers were filled in and did not reflect any weakening in demand for our wine among Chinese drinkers.

…Family-owned Casella Wines, owners of juggernaut label Yellow Tail, and De Bortoli Wines have also commented that wine shipments into China were slowing due to added red tape at the ports.

Blow me down, the AFR takes a break from its Beijing kowtowing today to lift the MB view:

Some suggest that Australia must bow down to the reality of Chinese power dominance. But the Indo-Pacific region is more contestable than this school of thought suggests. Australia retains a huge national interest in the peaceful rise of a more prosperous China. But, as China seeks to exert influence proportional to its rising economic and strategic clout, our bilateral relationship may become more strained. China’s authoritarian one-party government may “punish” us from time-to-time for sticking to our values and pursuing our strategic interests. That’s not a cause for panic.

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No, it isn’t. We should expect and hedge against it. Here’s how:

  • First, our economy must seek balance. To achieve that we will need a raft of new policies that aim to improve Australian competitiveness and get us out from under the commodity dependence. This is necessary anyway as China slows and changes and wants less dirt. We must reform energy, banking, and real estate to lower the currency, boost productivity and move from urbanisation growth drivers to tradables.
  • Second, we must engage strategically and diplomatically across our entire region. ASEAN is a natural partner to hedge Chinese influence. The Quadrilateral is also useful in bringing together allies. The US alliance must be constantly tended and revitalised. The Pacific must be treated as the good friend and partner that it is with significant aid and bilateral economic exchange, not the usual afterthought.
  • Third, Australian politics and society must be prepared and shielded to contain excessive Chinese Communist Party influence. This can easily be achieved via bans on foreign (or all) donations to political parties and the introduction of a federal ICAC. Society, too, is easy enough to protect if we have the will. There is no need, nor desire, for discrimination. We simply cut the permanent migration intake in half. It needs to be done anyway to take pressure off the east coast crush-loading. We should eschew both the cultural chauvinists of the Coalition and the “Asianising” influences within Labor. We are a multicultural democracy with liberal Anglophone roots. Let’s accept and protect it.

The defence will cost us some China trade. But over time we can deal with that.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.