Posted on 06/28/2021 2:38:19 PM PDT by SeekAndFind
Recently Chinese authorities have been scrambling to figure out a way to reinvigorate China’s failed trade war with Australia. Relations between China and Australia have been on a downward spiral over the last 12 to 18 months, triggered by the Australian government’s call for an international probe into the origins of COVID-19.
On June 24, 2021, Chinese authorities fired another shot by filing an action at the World Trade Organisation (WTO) against Australian tariffs on three Chinese imports, including railway wheels, wind towers, and stainless-steel sinks.
Days earlier, on June 21, Beijing announced a significant investigation into iron ore prices after being left red-faced following the rebound of the cost for the steelmaking ingredient in the last four weeks. This is despite continued attempts to bring it down.
Experts say that China’s continued reliance on Australia’s iron ore market, where 80 percent of its imports come from, has left the CCP “humiliated.”
China’s Wolf Warriors have barked and slapped a range of trade sanctions on Australian coal, wine, lobster, barley, cotton, beef, and timber in an attempt to hurt exporters.
They see these sectors as Australia’s soft underbelly and hoped that by turning the screws, they could force the government to back down on its insistence on a proper independent investigation into the virus.
However, instead of causing lasting damage, the CCP’s trade war has had the opposite effect.
Australian thermal coal from the Hunter Valley, exported via the Port of Newcastle, maintains its popularity with Chinese power utility firms due to its quality. It currently costs US $55 per tonne (5500 Kcal/Kg) from Australia.
In placing pressure on Australian coal imports, Chinese utility firms have been forced to buy the same grade quality coal from Russia at the whopping price of US $115 per tonne ($60 more).
But at the same time, there has been no significant decline in exports of Australian coal as producers diverted the bulk carrier ships that were deliberately held up for months by Chinese authorities and instead sent them to different markets, including India.
Indian power utilities used to buy their thermal coal from Indonesia, but with China now switching to Indonesia as a major supplier, the largest democracy in the world has begun buying from Australia (despite increased shipping costs).
Beijing’s trade war has cost Chinese utilities and power users more money, in fact, because they now must pay exorbitant prices for thermal coal from alternate suppliers.
Australian wine producers have also been negligibly affected by the trade war, with overall shipments down only four percent for the year ending March 2021 despite steep tariffs imposed by China’s Ministry of Commerce—ranging between 107.1 to 212.1 percent for a five-year period.
According to wine industry group Wine Australia, exports to China tumbled 24 percent, but exports to Hong Kong increased 55 percent over the same period.
The same is occurring with the lobster industry.
Australian fishing companies have not sold a single lobster to China—their biggest market— since November 2020 after Chinese authorities introduced prolonged testing procedures, effectively killing off live cray exports waiting on airport tarmacs.
Figures from the Western Rock Lobster Council showed Hong Kong imported about 340 tonnes of lobster in March this year, following import volumes of around 240 to 250 tonnes in January and February.
Before November 2020, volumes to Hong Kong were negligible. However, the big rise indicates importers in Hong Kong are also more than likely using the grey trade market to sell the product into China via unofficial channels.
The Chinese elite’s hunger for West Australian rock lobster and wine is thus insatiable.
Further, despite Beijing’s introduction of 80.5 percent tariffs on Australian barley exports (comprising an anti-dumping duty of 73.6 percent, and a countervailing or anti-subsidy levy of 6.9 percent) following an 18-month “investigation,” Australian barley producers have also found new markets in the Middle East and Asia (mainly Thailand).
There was even an Australian-first trial to sell premium malting barley to brewers in Mexico. All of these markets have helped replace lost trade to China.
Lastly, Australian growers and shippers claimed Chinese spinning mills were told to stop buying Australian cotton in October.
Cotton growers now expect high returns for their produce in 2021 as the industry expands into markets across Indonesia, Thailand, Vietnam, and Bangladesh.
All of which should prove a lesson to the Chinese regime’s Wolf Warriors, who have only operated within the confines of a closed-planned economy for many years, do not understand the adage of international trade, which is: The country that implements ineffective trade sanctions will be the loser in the long run.
Conversely, the target of trade sanctions (in this case, Australia) may be affected in the short term but will bounce back and prosper in the long run.
One also wonders if seeing the failure of their trade war with Australia will force China’s Wolf Warriors to realise the error of their aggressive behaviour that is only damaging China itself.
Tshung Hui Chang is a company director and has deep experience in the financial services industry across the Asia-Pacific region. He is fluent in Mandarin, Cantonese, English, and Bahasa. Chang has written and spoken extensively about the interference and influence activities of the Chinese Communist Party in Australia.
I’m for judiciously supporting the Australian economy wherever it makes sense to do so. The current government seems to be pretty good regarding supporting the US against China. A government that falls due to rubbing China the wrong way would be replaced with a Neville Chamberlain lookalike.
Also, in any conflict with China the US would probably need Australia as a staging ground. The more advantages the US has against China, the lower the chance they will have to be used.
China needs to grow up. This and other adolescent behavior is
getting tedious.
It’s the worst neighbor on the block, and after nearly
everyone tried to give it a helping hand.
WAY TO GO, MATES!
China’s Wolf Warrior I & II are cheap CCP propaganda pieces - modern PLA elite warriors overcome all odds against western imperialists - American, I think they were. Gets the Very Bad Acting Award.
Well written - a good review of Chinese nastiness.
China needs to grow up.
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Oh they will, right after they kill off 200 million or so Americans with a genetically engineered virus - covid was a dry run and data gathering exercise - after which they will move all Han Chinese (aka, the master race) onto America with its much desired clean soil, air and water. Search: The Secret Speech of General Chi Haotian - the blueprint of things to come from China.
I don’t discount the possibility of something like that.
Hey, it would sacrifice 3/4th of its populace gladly > IMO.
In addition to iron ore, China is desperately dependent on coal imports. Australia has been a reliable supplier. Australia has much more leverage with China than most of China’s trade partners and both know it.
The writer speaks Cantonese, which is commonly learned as a youngster. Bahasa is the formal version of Malay, Mandarin is the “Queen’s Chinese” and English is, well, the language of trade and aircraft.
Quite a novel path that he has chosen to learn.
And if he did indeed grow up in Hong Kong, I suspect that he will be well versed in backroom dealings of the mandarins.
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