China-Australia trade: what’s the state of relations after 3 years of ups and downs?

But what is the state of play in relations between Australia and its largest trading partner?

China officially imposed duties of between 116.2 per cent and 218.4 per cent on Australian wines in containers of up to two litres in March 2021 after concluding anti-dumping investigations.

The duties – higher than the preliminary tariffs – were due to be applied for five years, after the Chinese commerce ministry reiterated a decision made in November 2020 that the domestic wine industry had been hurt by the dumping of cheap Australian wine.

Canberra lodged a formal complaint with the World Trade Organization (WTO) over China’s imposition of anti-dumping duties on Australian wine exports in June 2021.

It is believed that Australia has asked for the tariffs on wine to be removed in full, or returned to the previous pre-sanction levels, before Australia will drop its WTO investigations.

In October, Wine Australia said Australian wine exports to China plunged by 92 per cent to A$21 million (US$13 million) in the year ended September 30.

China’s commerce ministry said in mid-April that it would review the necessity of continuing to impose anti-dumping and anti-subsidy tariffs on imported Australian barley, with the survey to be completed within a year.

Days before, Australian foreign minister Penny Wong said Australia would suspend its WTO case after China’s tariffs of 80.5 per cent on Australian barley all but wiped out imports of the grain by the world’s biggest beer market. Australia submitted its formal complaint to the WTO in 2020.

At the start of June, Farrell said that China’s review into the tariffs was heading in the “right direction” and that the process was “close to completed”.

Before the tariffs, trade had ranged between A$1.5 billion (US$1 billion) and A$2 billion a year.

Australian lobsters were caught up in the unofficial bans after Canberra called for an international inquiry into the origin of Covid-19 in 2020.

Since November 2020, legal imports of live Australian rock lobsters into China have fallen to virtually zero.

In 2019, before the ban was put in place, more than 90 per cent of Australian rock lobsters were exported to China, and figures from the Australian agriculture department showed that the market was worth about A$750 million (US$517 million) a year.

Australia has diversified lobster exports to Hong Kong and Vietnam, though some have entered the Chinese market via grey channels.

Coal was another commodity caught up in the unofficial bans after Canberra called for an international inquiry into the origin of Covid-19 in 2020.

In March 2020 – before China’s unofficial ban on Australian coal – imports of coking coal had reached 4.36 million tonnes, while 5.65 million tonnes of thermal coal entered the Chinese market, according to official data.