Via The Australian:
Uncertainty hangs over Australia’s $149bn in exports to China as a blockade of wine destined for the nation’s biggest trade show in Shanghai has heightened fears that a sweeping ban could follow within days.
More than a dozen wine exhibitors at China’s premier trade fair have had their products stopped by Customs since last week, crushing confidence in the outlook for the $1.2bn trade.
The industry’s anxiety was stoked as Australia’s biggest wine producer, Treasury Wine Estates, revealed on Wednesday that Beijing was considering further financial punishment for the $6bn, ASX-listed company.
Australian officials have raised China’s steep barley tariffs at WTO committee level in the past week as key industry players warn Beijing it is in danger of leaving one of its biggest state-owned entities out of pocket with any move against the wheat trade.
Farmers also want the Morrison government to do more to help after it rejected a grains industry budget submission for $20 million to help find new markets and reduce the reliance on China.
It is understood China has locked in up to 11 wheat shipments for December in deals done before a sharp rally in prices.
Cough up, ScoMo. That’s money well spent. Don’t bother with the WTO. This is personal. At CCP mouthpiece, The Global Times:
Chinese analysts believe the reported visit of Australian ambassador to China to the 3rd China International Import Expo (CIIE) in Shanghai, reflects Australia’s need for the Chinese market amid worsening diplomatic ties and its economic consequences.
The Australian Ambassador to ChinaGraham Fletcher is reportedly to visit the CIIE, according to media reports. The visit came after China halted seven categories of Australian goods from the market.
But analysts warned that Chinese consumers’ confidence in Australian products would significantly drop if Australia continues to sabotage bilateral relations, which would cost Australia its best and biggest market, jobs and an opportunity to quickly recover from the pandemic.
Fletcher’s trip came after Bloomberg News report that China had asked traders to stop purchasing at least seven categories of Australian products – coal, barley, copper ore and concentrate, sugar, timber, wine and lobsters. The “most sweeping” halt will begin on Friday.
The news has apparently sent shockwaves to Australia.
…Former Australian Ambassador to China Geoff Raby wrote in his new book that the complementarities between the two economies “are so profound that Australia’s economic dependency on China will not change” unless Australians choose to accept a major cut in their living standards.
The former diplomat told The Guardian that Australia turning to other markets is “nothing more than wishful thinking.”
At this point, I think it fair to declare Australia’s policy of “strategic patience” with the CCP a bit of a joke. China is not doing a trial separation, it has filed for divorce.
As such, we should be calling the lawyer to ensure we get as much out of this failed relationship as we can as it turns toxic.
Our best shot in that regard is to apply an iron ore export tariff. This year we will export about 750mt to China. Every 10% tariff that we apply at today’s prices will deliver $7-8bn.
We could go much higher if we want. Or, start there and ratchet it up every time a wolf wanker opens his potty mouth. It’s also a great way to be compensated for the virus damage China has inflicted upon Australia.
China will almost certainly react by cutting off all remaining exports but it’s doing that anyway so let’s get ahead of the game and extract some rent where we can.
A bigger concern is that the CCP’s next step will be to quietly threaten Australians in Hong Kong so we should announce the highest level of travel warning to HK in advance. Aussies in HK need to get out anyway. As the CCP made clear in Canada last week, western expats are hostages in all but name.
China will have to pay whatever price we put on iron ore. If it refuses to buy our dirt then the key building block in Chinese stimulus will collapse delivering a nasty poke in the eye to dictator Xi Jinping.