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Treasurer Frydenberg’s outlook on the Australia-China trade war

The Australian Treasurer, Josh Frydenberg MP, spoke recently about the Australia-China trade war and how Australia exports, such as beef, barley and wine, which targeted by Chinese anti-dumping probes and subjected to high tariffs (some of which has been contested by Australia at the WTO) have found new markets outside of China. Here are the highlights from Treasurer Frydenberg’s speech on the Australia-China trade war:

The future of the Australia-China Relationship

  • “I expect Australia to continue to have a challenging relationship with China for some time.”
  • “But I expect the relationship to continue to be challenging. You do point out that it has cost us, but it’s also cost the Chinese economy because they haven’t been able to receive Australia’s high premium, high-value exports; whether it’s wine, whether it’s barley, or indeed, whether it’s coal which is so important to their industrialisation.”
  • “China released a list of so-called fourteen grievances which they had with Australia.”
  • “They were everything from our posture on national security issues, to foreign investment, to the right of politicians to speak their mind; a pre‑condition for our democracy that we love so much. We will continue to defend our interests, we will continue to make very clear to China, and indeed, to any other country that we won’t compromise on those interests.”

The Australian economy’s resilience

  • “Australia has been the target of China’s economic coercion, our exports like barley, like beef, wine and coal, have been targeted.”
  • “But despite that, the Australian economy has shown its remarkable resilience. Our exporters have found other markets.”
  • “But the point of my speech today was to emphasise the resilience of the economy and to underline the fact that we won’t compromise on our national interest, nor on our values.”
  • “We will be steadfast. We will be clear. We will be consistent. And we will look for alternative markets.”

Not all of China’s tariffs are working

  • “The agricultural produce is one that China has targeted. When it comes to bulk commodity like coal, it’s easier to diversify and find new markets, less so with some of the other niche products. With respect to our biggest export, iron ore, China can’t find an alternative source of iron ore to Australia, at least in the near term.”
  • “Our iron ore is high quality and it’s, obviously, very large volumes as well that we export to China, as well as other countries. They’re trying to develop new markets, or new mines and new supply in Africa, but they can’t replicate the Australia iron ore very readily, and that iron ore is obviously critical to their domestic economic strength, but also to their exports because they are the world’s largest steel exporter and they rely on Australian ore to help make that domestic steel production.”

 

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