Australia has caught much of China’s ire throughout the pandemic, with disagreements around trade and the origin of COVID-19, among other issues, catalysing Beijing’s campaign of economic coercion against Canberra.
“China is our largest two‑way trading partner, accounting for over 30 per cent of our trade,” said Treasurer Josh Frydenberg.
“However, it is no secret that China has recently sought to target Australia’s economy.
“Citing 14 so‑called ‘grievances’, covering everything from our foreign investment laws to our willingness to call out cyber‑attacks.”
Speaking at the ANU forum on the topic of “Global Realities, Domestic Choices”, Mr Frydenberg highlighted the strength of the Australian economy, despite navigating over a year of Chinese economic sanctions on key agricultural and resources products, including wine, seafood, barley and coal.
“Despite China’s wide‑ranging actions, our economy has continued to perform very strongly,” Mr Frydenberg stated.
“At the headline level, this is best reflected in our unemployment rate, which has fallen to 4.6 per cent. The lowest level in around 13 years.”
According to Mr Frydenberg, key to Australia’s resilience has been an ability to diversify their trading relationships, ensuring trade remained at a healthy surplus, bolstered by record commodity prices.
“Our trade surplus hit a record high in the June quarter of $28.9 billion,” he said.
“Of those goods targeted by trade actions, our total exports to China are estimated to have fallen by around $5.4 billion over the year to the June quarter.
“But over the same period, exports of those goods to the rest of the world have increased by $4.4 billion.
“Our two‑way trade with the US was worth around $73 billion in 2020, our trade with Japan was worth around $66 billion, and our trade with South Korea was worth around $35 billion.”
Mr Frydenberg also stated that the federal government will continue to support businesses targeted by Chinese coercion, citing the aid provided to the agricultural sector.
“In the vast majority of cases, Australian businesses will have the capacity to pivot and respond to economic shocks, without direct Government support,” said Mr Frydenberg.
“However, where necessary, we will continue to support our businesses to adapt to the new environment that they face.
“As part of our Agri‑Business Expansion Initiative, the Government is providing $72.7 million dollars to help our farmers diversify and open new markets.”
Despite this, the Treasurer highlighted that Australian businesses should also use such support as a springboard to reduce their own reliance on the Chinese market, enhancing their overall resilience.
“It is also the case that Australian businesses will need to enhance their own resilience,” he said.
“Many have worked hard to access the lucrative Chinese market. This has brought great benefits to them and to Australia overall and they should continue to pursue these opportunities where they can.
“But going forward, businesses also need to be aware that the world has changed and that this creates greater uncertainty and risk.
“In this respect, they should always be looking to diversify their markets, and not overly rely on any one country. Essentially adopting a ‘China plus’ strategy.”
