Guru Gyan
Published in

Guru Gyan

Australia & China’s ‘Deteriorating Relationship’

After the U.S., and India, China’s relations are now deteriorating with Australia as the relationship between the two countries turns sour this year.

Escalating dispute

Australia is going to initiate the World Trade Organization (WTO) action for tariffs imposed on Australian barley by China, therefore, escalating the trade dispute. Australia’s trade minister Simon Birmingham described the decision as logical and appropriate next step to take for the country after urging Beijing to resume dialog to ease the worsening diplomatic dispute.

‘WTO dispute resolution processes are not perfect, and they take longer than would be ideal, but ultimately, it is the right avenue for Australia to take.’, he added.

The relations between the two countries soured earlier this year, and amid that China in May imposed anti-dumping and anti-subsidy duties totalling 80.5% on Australian barley. Not just barley, China had slapped up to 212% of taxes on Australian wine and launched a countervailing investigation into subsidized Australian wine imports. Beijing has been targeting Australian imports for products such as sugar, barley, beef, lobsters, and possibly coal.

China is Australia’s largest trading partner, for both exports and imports, therefore, the sectors targeted could take a hit until they find opportunities to sell majorly in other markets.

Political tensions

Tensions between the two countries have been intensifying this year, which wasn’t the case before. And now the issue seems to be more political in nature which is turning into a trade dispute.

Experts believe that it all started after Australia took certain stands regarding certain matters related to China that may have not been appreciated by Beijing. Australia had raised concerns about human rights in Xinjiang and Hong Kong. It had also banned Chinese firm Huawei from building the country’s 5G network. The country also backed the global enquiry into the origin of the Covid-19 that may have fuelled the tensions.

Soon after these political remarks by Australia, China started imposing trade sanctions on the country, citing contamination, pests, and shipment errors for the restrictions.

New actions

Trade minister Birmingham said they are highly confident that based on the evidence, data and analysis that they have put together already, Australia has an incredibly strong case. He also mentioned that there could be a possibility of further actions.

On another hand, news reports suggested that China is going to place new restrictions on Australian coal for which the Australian Prime Minister Scott Morrison has accused Beijing of breaching the International trade rules and their agreement.

Looks like the trade fight may escalate further with being nowhere near the end once WTO interferes, unless both parties are willing to sit down and work through the relevant issues.

Head to moneyguru’s Insight section to stay updated on all major financial news updates of the day!



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store


Your Best Direct Mutual Fund Investing Experience Begins Here. Invest, Read and Track — at one place & for free! vist us at: