China and Australia are making significant efforts to repair relations, more than two years after Beijing ratcheted up its trade conflict with Canberra with an unofficial boycott on Australian coal.
So far this year, Chinese imports from Australia are up 8.4% from a year earlier
China and Australia are making significant efforts to repair relations, more than two years after Beijing ratcheted up its trade conflict with Canberra with an unofficial boycott on Australian coal.
Australian prime minister Anthony Albanese met Chinese premier Li Qiang in Beijing on Nov. 7, the first visit to China by an Australian leader since 2016, to resume once-annual top-level talks. Albanese described his visit, as “very successful,” adding that it was “an important step in stabilizing relations with China, our largest trading partner.” Li reciprocated the sentiment, noting “enormous” potential for cooperation between China and Australia.”
Meanwhile, Chinese state broadcaster CCTV described Albanese’s visit (link in Chinese) as an “icebreaker,” recalibrating the two countries’ relations following a stormy period between them.
Improvements in trade relations between China and Australia are evident in the trade numbers. So far this year, Chinese imports from Australia have risen 8.4%, according to Chinese customs data released on Tuesday. That’s a stark difference from the European Union, where exports to China imports are slumping as tensions rise over the EU’s probe into Chinese electric vehicle subsidies.
Beijing has another incentive to repair its ties with Canberra—its unilateral trade bans largely failed as Australian exporters redirected their goods to other buyers. And China needs Australia’s resources to feed its economic machine: even during the depths of the trade conflict, China’s two main imports from Australia, iron ore and liquefied natural gas, were left untouched. Chinese companies also see lucrative opportunities in staking claims to Australia’s strategic mineral resources, including rare earths imports.
For Australia, China’s propensity for economic coercion to achieve political aims underlined the importance of not being overly dependent on one country for trade. As Australia’s trade minister Don Farrell put it last month, “We want to stabilize our relationship with China... we also want to diversify our relationship.”
Then there’s China’s sputtering economic growth. Its exports have slumped for six months straight, with October seeing a 6.4% decline compared to a year earlier, steeper than September’s 6.2% drop. With numerous signs of economic health flashing red at home, Beijing likely sees this as a convenient time to patch things up with its major trade partner down under.
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