Illustration:Dionne GainCredit:The Sydney Morning Herald
Beijing had put bans on more than $20 billion worth of Australian exports to China and then issued its list of 14 demands on Australian sovereignty. We were left to suffer and reflect on our sins. From the outset,Xi Jinping’s regime was careful in choosing the trade to be banned. It did not ban the biggest trade of all,Australian iron ore,essential for steelmaking. But Beijing calculated that it could live without Australian coal,beef,barley,wine,seafood and more.
It was wrong. In recent days we discovered that China quietly has set aside its ban on Australian coal. Bulk carriers that had anchored off China’s ports a year ago were now being called to unload their cargoes. London’sFinancial Times last week reported that some 400,000 to 500,000 tonnes of Australian shipments had been discharged in the preceding month.
That’s small beer. But the point is that China’s electricity crisis is so painful that it has been forced to partially lift its boycott to keep the lights on and the factories running. Australia did not yield to any of Xi’s demands;the vast bulk of the Australian export trade merely diverted to other markets,notably India,instead.
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Australia coped pretty well with China’s ban,but China did not. That’s the first development. Among all the Australian industries boycotted by Beijing,the total value of lost sales to China was $5.4 billion in the year to June 30,while those very Australia exporters gained new sales of $4.4 billion in other markets,Treasurer Josh Frydenberg says. “Despite China’s wide-ranging actions,our economy has continued to perform very strongly.” And,overall,total Australian goods exports to China have hit a record high,largely because of a surge in the value of iron ore.
The second development came last month when Xi asked permission to join a big Asia-Pacific trade grouping with a collective GDP of about $US11 trillion. The 11-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership,or CPTPP,has been described as a “21st century” agreement because it embodies high labour and environmental standards.
Its members include Japan,Canada,Vietnam,Malaysia,New Zealand and Singapore. Australia,too. As a consensus-based organisation,every member must agree to admit any newcomer. China’s embassy in Canberra lobbied the Australian Parliament in a submission that promised “China’s accession to the CPTPP would yield large economic benefits”. Trade Minister Dan Tehan said Canberra couldn’t agree as long as Beijing had trade sanctions in place against Australia. And neither is Japan nor Canada excited at the prospect of Beijing joining.