Australia on edge as trade strike from China seems increasingly likely

Uncertainty around exports to China continues with rumour and speculation rife about a trade strike against Australia.

Tensions only continue to rise with reports circulating in international press, including the South China Morning Post, that China may impose an anti-dumping duty of more than 200 per cent on Australian wine as soon as next week.

For Australia’s 2400 wine exporters to China, it is a cause of great anxiety, especially for smaller exporters for whom China is their sole market. Wine exports to China were worth $1.26 billion dollars in 2019.

The Global Times has reported that "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 CIIE starts next week.

Chief Executive of Australian Grape and Wine, Tony Battaglene, spoke with Drinks Trade on Wednesday.

“There is plenty of rumour and speculation. We do know that some exporters have been told by importers to stop shipping for now. We have seen documents, alleged to be from meetings that importers have had with the Chinese Ministry of Commerce, that shipments will be stopped from this Friday. But we are unable to verify their accuracy,” he said.

China’s Ministry of Commerce has denied any such directives.

“We have shipments on the water so we will know by next week or the week after. We’ll see what happens on Friday,” said Tony.

Speaking on Radio 2GB yesterday, the Federal Minister for Trade, Simon Birmingham, said: "We certainly know that there are some actions that have been taken during the course of the year that are clear steps by the Chinese Government. In terms of the imposition of tariffs on Australian barley, the banning of certain meat processing plants in Australia, the commencement of anti-dumping proceedings against our wine industry, they are all transparent Government decisions.

"We dispute aspects of them and continue to argue the fact that Australia is not a country who subsidises our industries. We're not a country who dumps our product, and we work to defend the integrity of our exporters in that regard. "

In addition to wine, shipments of Australian lobster, sugar, coal, timber, wool, barley and copper ore may also be unofficially suspended from November 6. This date has been reported in the Global Times and has also been published locally by The Australian Newspaper today.

On Mondy, Agriculture Minister David Littleproud said China was inspecting between 50 and 100 per cent of Australian rock lobsters, citing concerns about trace elements of metals.

The potential stoppage comes on the back of China’s anti-dumping and counterveiling investigations launched in August and September. Since the investigations were announced, Australian exporters spoken to by Drinks Trade have expressed their intention to fully cooperate and have commented on the growing appetite and market in China for top quality Australian reds.

Recent Australian wine export figures suggest that there was a huge surge in demand for Australian reds in the Chinese market this last quarter, perhaps in anticipation of trade tariffs or, perhaps, anticipating the stoppage that could well be in play from Friday.