Australia Left In Lurch As US Goods Replace Aussie imports of China
After the China Australia spat, Chinese people were having a hard time. There was huge shortage of beef as China had drastically reduced imports of beef from Australia. During the same time even Argentina had stopped exporting beef to control rising prices within the Country itself.
Now Chinese importers and companies are replacing Australian imports ranging from frozen beef, barley to coal with goods produced in other countries, including Australia’s so-called ally the US reported several Chinese business executives. Chinese are gleeful as this reflects Australia’s embarrassing political scenario for being a blind follower of the US.
The changes came amid worsening China-Australia relations, which resulted in a severe drop in China’s purchase of Australian products like beef and barley. On the other hand, China is buying more of those goods from the US to fill the void.
Australian beef exports to China had peaked at almost 330,000 tones, worth A$2.7 billion ($1.96 billion) in 2019. South China Morning Post reported Australia’s traditional lead over the US in frozen beef exports to China started to turn recently. In April, the US exported $68 million worth of frozen beef to China, less than Australia’s $80 million exports. By July the gap widened in favor of the US. US exports of frozen beef to China hit $107 million, compared with $35 million from Australia.
Despite Washington’s support to Canberra, it seems that the US did not hesitate to take over Australia’s place as a leading beef exporter to China. Australia shipped more beef to China than the US until April. In May, the pattern reversed and the US sold $90 million of frozen beef to China, nearly twice the amount of Australia’s sales of $ 47 million.
Australia shipped over $200 million worth of frozen beef to China in January 2020, over 20 times more than the US. Since then, the gap started to narrow down until it hit the cross point in May, and the trend has continued with growing shipments from the US while Australia’s are decreasing, according to the report.
A similar trend has been seen in other sectors as well, such as Australian wine, timber and coal. Instead of confronting China or accusing China for an alleged “economic coercion”, perhaps it is time for Canberra to discern the real role behind the US’ campaign of “standing with Australia” against China.
As per The Chinese Media, the Morrison administration has been deteriorating the relationship with its largest trading partner. In breach of international law and basic norms of international relations, Canberra has grossly interfered in China’s domestic affairs, hurt Chinese interests and wantonly placed restrictions on bilateral exchanges and cooperation.
Australia and the US are major agricultural exporters across the world, with their products maintaining a leading position. What’s crystal clear is that the US will not support Australia at the cost of its own interests. While boosting agriculture exports to China under the initial phase of the trade deal both sides signed in January 2020, the US did not forget to collect benefits from Australia’s reckless efforts to accelerate tensions with China, which have been incited by the US.
Even though the Biden administration has attempted to lure its allies to form small cliques, its “America first” policy has not changed and the interest of its allies are not under its consideration.
Although exports of mineral resources have continued to boost Australia’s performance, it cannot be ignored that more industries have suffered badly under Canberra’s ill-advised strategy of confronting China.
In fact, Australia was one of the first countries banning China’s Huawei with baseless “security risk” accusations and has been irrationally heightening scrutiny over China’s investment. In August 2020, Chinese dairy behemoth Mengniu Dairy was forced to ditch a A$600 million acquisition deal to secure the Australian dairy brand Lion-Dairy & Drinks after Canberra said the business deal was “not in the national interest” of Australia.
China launched anti-dumping and countervailing investigations against imports from Australia in accordance with Chinese laws and WTO rules. Pulling a political stunt and hyping up the so-called “economic coercion” cannot help Australian industries. If Australian cannot redress its wrong strategy and genuinely take efforts to restore mutual trust and cooperation between the two sides, its beef exports to China may not recover.
A manager from the Shenyang Huayue Foreign Economic And Trade Company said that the firm has been importing more US beef recently to replace Australian beef, although he didn’t mention the exact amount.
“It’s difficult to import (Australian) beef since China-Australia disputes,” he said, adding that Australian beef is more expensive than US ones.
Zhan Qiang, general manager of the Shanghai Wei’erbo Food Company, which processes and sells beef steak, also said that his company has been gradually reducing sales of Australian beef. In the past, Australian beef accounts for about 30 percent of the firm’s total purchases.
“Australian beef supplies are very unstable in the market. Purchasers often find them in short supply, and we have gradually given up using Australian beef,” he said, attributing the situation partly to the deteriorating China-Australia political environment.
Zhan said his company has used beef from South America, Canada and New Zealand to replace Australian beef. They also buy US beef to fill the gap, but not in large amounts.
He also noted that there’s not much difference between Australian beef and other beef, apart from the fact that Chinese consumers used to have a friendlier attitude toward Australian goods.
Apart from frozen food, other Australian products are also facing increasing market chill. An employee from an agricultural trade company from Yancheng, East China’s Jiangsu Province said that his company reduced imports of Australian barley to escape the 80 percent anti-dumping and anti-subsidy duties placed by China on Australian barley imports since last year, and is purchasing more from Argentina, France and Canada.
Coal exports are another example of the changes in trade. In April, China imported 974,000 tons of coking coal from the US, up from 279,000 tons in January, customs data showed. In comparison, Australia’s exports of coal to China have almost dropped to zero.
Zhao Jianguo, secretary-general of China’s Coal Transportation Association, said that although US coal exports to China have increased, the increase is limited.
“The quality of US coal is relatively low, while the long distance between China and the US increases time and shipping costs,” Zhao said. About two-thirds of China’s coal imports come from Indonesia.
The fact that Australia is seeing its market share being stolen by US competitors despite the two countries’ “alliance” against China shows Australia’s “immature, wishing thinking” policymaking, experts said.
“Australia imagines that the US will be firm on its side, but actually it is losing market share to its so-called ally, and Australia is getting nothing but an embarrassing scenario,” said Chen Hong, a professor and director of the Australian Studies Centre at East China Normal University,. “It sees the US as a friend, but actually the US is a competitor of Australia because of their industrial overlap.”
He said Australian politicians have not realized that Australian products are not unique and can be easily replaced in the Chinese market. “They can’t handle economic issues with a rational method, and it’s Australian agricultural trade businesspeople that are taking the hit,” he said.
Well Australia needs to learn from all this and must try and establish closer relationship with Countries of South East Asia, India and other SAARC countries.
