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.
However, in food exports, some products went against this trend. Meat and live animal products are still “stable,” according to Langcake, and are being sent to China despite restrictions.
According to Oxford Economics, the worst hit products include wood, seafood, beverages, cooking oil, coal, fiber, footwear, cereals and sugar.
Australian authorities have accused China of trade sanctions. In a statement to the World Trade Organization last week, Australia said: “China states that these actions reflect legitimate trade concerns, but there is increasing information that China’s actions are motivated by political considerations.”
On Tuesday, the WTO said it agreed to install a panel Consider China’s obligations on imported Australian wines, According to Reuters.
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.”
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