This story first appeared on TheStreet.com.
Is China punishing Australia by imposing a secret ban on a series of Aussie imports? That appears to be the case, with November 6 reportedly set as the day for the ban to begin.
Beijing has ordered a halt to the import of a wide range of Australia products, with at least seven product categories temporarily banned, according to a Bloomberg report citing “people familiar with the situation.”
The hit list would stop inbound shipments into China of coal, barley, copper ore and copper concentrate, sugar, timber, wine and lobster, the report states. The sources asked to remain anonymous because the information is sensitive.
Any temporary ban on commodities such as coal and copper would go much further than previous one-product restrictions, normally on high-profile consumer goods. China is Australia’s top trading partner, accounting for A$136 billion in imports into China in 2018, according to figures from the Australian government, with A$78 billion in Chinese goods heading the other way. That total two-way volume is up 35.8% since 2016.
Ore shipments explain why Australia punches above its weight as China’s sixth-largest source of imports, on par with Germany. Australia’s total trade ranks it as China’s 14th largest partner, matching the size of the Aussie economy.
China often changes visa restrictions for its citizens without any public notice. It often tries out policy changes in the securities industry by letting industry insiders experiment without any official announcement of a change in the rules to see how things go. And it occasionally restricts permissions for the import of certain specific goods in retaliation of perceived slights.
But China normally publicizes its punishments on trade. So it is unusual that Aussie exporters are in the dark on any trade ban about to come down.
The effects are already being felt.
Lobsters languish
Tons of live Australian lobsters have been left stranded on the tarmac of a Chinese airport, The Sydney Morning Herald reports, with customs clearance taking too long for the shellfish to reach restaurants before they are spoiled.
Australian Trade Minister Simon Birmingham says he knows about the reports of “customs clearance issues” on premium shellfish shipments into China. Paperwork suddenly becomes hard to come by if China wants to punish companies from a particular nation or multinational. So-called “health and reliance checks” have been holding up shipments into Shanghai, with China the destination for 94% of Australian rock lobster exports.
The trade minister said “discriminatory screening practices” imply a breach of World Trade Organization rules and a breach of the China-Australia Free Trade Agreement.
I doubt Beijing’s bigwigs are going to let that bother them. World Trade Organization (WTO) and United Nations rules and protocols are very useful when China wants something, less so when they don’t suit Beijing.
Virus vitriol
China and Australia are at odds diplomatically after Australia requested an independent investigation into the origins of the coronavirus. Australia has also sent its warships to participate in “freedom of navigation” trips through waters that China claims in the South China Sea.
China pushes dodgy evidence of centuries-old fishing trips by Chinese vessels as justification for a land grab over the oil-and-gas-rich waters right up to the shores of the Philippines, Brunei, Malaysia and Vietnam. All those nations are fighting China with legal challenges over their territorial rights.
The trade restrictions began in May, when China introduced heavy tariffs on Australian barley and suspended imports of beef from some Australian slaughterhouses.
China has since launched an investigation into whether Australia’s wine producers are dumping bottles at cut-rate prices on the Chinese market. The Australian cotton industry says Chinese spinning mills have been told to stop buying Australian cotton.
Pressure tactic
The China International Import Expo is taking place this week in Shanghai, at which President Xi Jinping sung the praises of international trade. Officially, China’s commerce ministry has denied that Australian goods are under a ban.
Trade analyst Jeffrey Wilson told The Guardian this is a classic example of “gray zone” diplomacy, where China is attempting to scare Australian companies over access to a key market, using trade to exert political pressure.
“The ambiguity is by design,” he says. “It’s not a trade war, it’s psychological war.”
Shares in Treasury Wines Estates fell 8% in Thursday trading in Sydney after the maker of Penfolds wines said China’s drinks industry is requesting Beijing to impose unprecedented retrospective tariffs on Australian wine already sold in China. That’s part of an anti-dumping investigation launched in August by China’s commerce ministry.
Spying spat, too
Besides their public diplomatic spats, China and Australia are also engaged in a clandestine fight over spying and undue political influence over Aussie politics.
Sunny Duong, a Chinese-Australian community organizer, on Thursday became the first person charged over foreign interference in Australian politics under new Australian national security laws. Duong, who heads the Oceania Federation of Chinese Organisations from Vietnam, Cambodia and Laos, has been a prominent donor to the pet projects of various Australian politicians.
There are no details as yet as to what Duong, who has been very public with his appearances alongside Australian politicians, is supposed to have done wrong. But the Australian Federal Police raided several properties in Melbourne on Oct. 16 in relation to the investigation.
Australia’s spy agency, the Australian Security Intelligence Organisation (ASIO), has worked with the FBI-equivalent federal police on a counter foreign interference (CFI) taskforce in a year-long investigation.
“The CFI taskforce has taken preventative action to disrupt this individual at an early stage,” Australian Federal Police deputy commissioner Ian McCartney said, according to The Guardian. “Foreign interference is contrary to Australia’s national interest, it goes to the heart of our democracy. It is corrupting and deceptive, and goes beyond routine diplomatic influence practiced by governments.”
ASIO began warning in 2017 of Chinese influence attempts to control Australian politics through donations and sympathetic politicians.
In a blockbuster 2019 allegation, ASIO said it was investigating evidence that Beijing attempted to plant its operative as an elected official into the national Australian government. ASIO went public after news media broke the story. A Melbourne luxury car dealer, Bo “Nick” Zhao, reportedly told ASIO he was offered a “seven-figure sum” to run for government by a Chinese spy ring. Zhao was found dead in March 2019 from unexplained causes in a Melbourne hotel room.
As is typical, China has countered that Australia has been spying on China on a mass scale, instigating defections, spying on students and feeding false stories to the news media. A foreign ministry spokesman, Zhao Lijian, said in response to a report that Australia has tried to bug the Chinese embassy in Canberra that Australia is playing the “part of the victim, peddling rumors and stoking confrontation by staging a farce of the thief crying ‘stop thief.'”
Chinese exiles say they have faced intimidation from pro-Beijing squads while sheltering in Australia. It is a similar situation to what other Chinese exiles say has been happening in the United States. It appears these shadowy squads are sent to silence Beijing’s critics or force them to return to face Chinese courts through threats against their families in China or abroad.
Australia was the first country to ban the Chinese tech giant Huawei Technologies from involvement in the country’s 5G mobile phone network. It cited national security concerns.
However, China is particularly angry over Australia’s demand for an investigation into the roots of Covid-19. It has worked very hard behind the scenes to force concessions from the World Health Organization as to how it will investigate the virus, with the WHO leaving many key decisions to China, and hobbled in its attempts to send its own scientists to the virus epicenter in Wuhan.