Australia’s exports to China are skyrocketing despite trade conflicts

BHP Billiton Ltd. freight trains carrying iron ore travel along railroad tracks to Port Hedland, Australia.

Ian Waldy | Bloomberg | Getty Images

China is buying more commodities from Australia this year, even though trade surges are showing no signs of waning.

Australia’s exports to China have increased by 24% from a year ago to over A $ 180 billion ($ 135 billion) as of the latest August data, according to research firm Oxford Economics.

According to monthly data, goods to China reached a record high of A $ 19.4 billion in July, a 72% surge over a year ago.

Relations between the two countries have deteriorated sharply since Australia supported the call last year. Global Survey on Handling of China’s First Covid-19 Outbreak..

Since then, these tensions have permeated Chinese sanctions on Australian commodities. It ranged from imposing tariffs to imposing other bans and restrictions — Affect Australian products Includes barley, wine, beef, cotton and coal.

“Trade relations between Australia and China are becoming more stringent, which poses a significant downside risk to the outlook for the past year,” said Sean Langcake, chief economist at Oxford Economics. rice field. “Certain Australian products impose trade barriers and are steadily escalating as diplomatic tensions increase.”

But through all that, Australia’s exports to China are “very well-held,” the company said in a note on October 22.

Australia is one of the few developed countries to enjoy a trade surplus with its largest trading partner, China.

Iron ore drives export growth

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Despite the sanctions, Australia has succeeded in diverting banned exports to other countries, according to Oxford Economics.

“A key issue for exporters throughout this episode was their ability to pivot to alternative export destinations when faced with barriers when exporting to China,” Langcake said. “Encouragingly, we found evidence of trade diversification rather than a collapse of export performance.”

As an example, coal is in the limelight. Chinese regulations on Australian coal Stay on the spot despite the country Worst power crisis In a few years due to a shortage of products.

Coal exports from Australia India facing its own coal shortage — Oxford Economics said Japan and South Korea soared.

— CNBC’s Saheli Roy Choudhury contributed to this report.

Australia’s exports to China are skyrocketing despite trade conflicts

Source link Australia’s exports to China are skyrocketing despite trade conflicts

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