China-Australia relations: trading relationship still strong with growing divide between ‘rhetoric and reality’

China’s total imports from Australia in May rose more than 55 per cent from the previous month to US$13.6 billion, while exports rose just over 1 per cent

The Australian Chamber of Commerce and Industry says political posturing between the two countries does not reflect the actual appetite for trade

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China’s total imports from Australia in May rose more than 55 per cent from the previous month to US$13.6 billion, official data shows. Photo: Bloomberg

Published: 4:30am, 9 Jun 2021Updated: 5:50am, 9 Jun 2021

Australian businesses say there are signs the trade relationship with China will not collapse as exports and imports between the two countries continue to be healthy despite bans on certain products.

China’s total imports from Australia in May rose more than 55 per cent from the previous month to US$13.6 billion, while exports rose just over 1 per cent to US$4.9 billion, according to Chinese data released on Monday.

The growth is an extension of the buoyant trading pattern between the two countries, which, despite being at risk due to ongoing bilateral tensions, remained resilient thanks to the iron ore trade.

In an in-depth survey of businesses released late last week, exporters told the Australian Chamber of Commerce and Industry that despite finding “business as normal” with China impossible – particularly after Beijing unofficially banned several Australian products, including wine, barley and log timber – political posturing between the two countries did not reflect the actual trading appetite.

Exporters were confident the China-Australia Free Trade Agreement (ChAFTA) – which has led to an explosion of Australian exports to China over the past six years – would remain intact and indicated “the divide between both the rhetoric and reality will continue to grow”.

“My suspicion or my expectation is that the ChAFTA will remain in place and the reason I say that is Australia did sign up to the Regional Comprehensive Economic Partnership (RCEP) that involved China earlier in the year and it did that at a time where China was imposing its own protectionist measures and doing the steps that Australia is objecting to,” one senior manager said in the survey.

“So it’s one of those huge contradictions … [Australia] criticising China’s approach to trade but then giving China a big sign of international support by joining up to a free-trade agreement, which they were essentially the champion of … the [Australian] government understands how important the FTA is.”