China-Australia trade declines sharply amid estranged ties
Since last two years China has adopted a hostile political attitude toward Australia as a punitive measure for opposing its moves in the Indo Pacific. This has led to the politicization of trade between the two countries. Starting with imposing of high tariff rates, China started reducing the import of Wine, meat products, Soyabean, iron ore and coal.
The Australian government then asked the state of Victoria to withdraw from all contracts with Chinese firms under the Belt and Road Initiative. This totally worsened bilateral relations as China was livid.
Initially Australia lost it’s Chinese market who claim to be the world’s biggest importer, but soon things began to stabilize as Aussie forged better trade relationship with India and other Asian Countries. In fact it is China which is at the receiving end. China has been forced to continues to cut steel production as cheaper Australian imported iron ore is no more available.
To hide the real problems, the Chinese Ministry of Industry and Information Technology has been forced to issue a notice saying that from November 15 to December 31, steel factories in Beijing, Tianjin and North China’s Hebei Province should implement off-peak production, in order to reduce carbon emissions and overhaul the industry to tame a price surge.
Trade between China and Australia saw a sharp month-on-month decline in September, according to data released by the General Administration of Customs (GAC) on Wednesday, underscoring rising pressure on bilateral trade from deteriorating bilateral relations.
In September, total bilateral trade reached $21 billion, a decline of about 12.5 percent from around $24 billion in August, according to a calculation of GAC data.
The sharp fall in bilateral trade comes as In September, China’s iron ore imports declined 12 percent year-on-year, according to the GAC.
As Australia’s largest importer and trading partner, China had been taking advantage of cheap coal, iron ore and other raw materials. However now the cost of production of steel and other such items will become much higher, making Chinese items less competitive in the Global Market.
Chinese goods are already facing a major boycott in India and many other countries.
