(Bloomberg) — China is an “important trading partner” for Australia and will remain so in the face of headwinds ranging from Covid lockdowns to supply-chain disruptions, a senior government official said Wednesday.
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“It’s such an enormous economy. It will be almost unimaginable to think that that importance will decrease significantly,” said Elizabeth Bowes from the Department of Foreign Affairs and Trade.
Speaking at an Asia Society panel discussion in Melbourne, she highlighted that Australia’s exports to China are higher than this time last year, following record two-way trade of A$282 billion ($178 billion) in 2021.
Australia has been a rare beneficiary of Russia’s war on Ukraine. The invasion triggered a commodity squeeze that sent prices for coal and liquefied natural gas soaring, providing a windfall for the resource-rich economy.
That run is clouded by economic headwinds in China, the only country in the world still pursuing a Covid-Zero strategy, as well as a lack of resolution over trade bans and tariffs on Australian goods.
Ties between the two countries hit rock-bottom during the height of the pandemic in 2020 when Australia called for an independent inquiry into the origins of Covid-19 in China. Beijing responded swiftly, imposing punitive trade actions targeting Australian commodities from coal to barley, lobsters and wine.
“Those factors have highlighted the risks in market concentration and really highlighted the importance of diversity of markets and in products and services that Australia exports and imports,” Bowes said. “We’re looking at delivering new agreements. That is a very key plank of the government’s trade diversification agenda.”
Earlier this week, Australia announced a new green economy trade deal with Singapore, targeting sustainable agriculture and green shipping corridors.
This “could be a model for expanded agreements in the important area of environment for the future,” Wendy Cutler, vice president at the Asia Society Policy Institute, said on the same panel.
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