Treasurer Josh Frydenberg stated that Australian products found new destinations but warned that local businesses must prepare for new tensions with Beijing.
Australia must diversify its economy to become less dependent on China. Its most significant trading partner, Treasurer Josh Frydenberg, said on Monday, warning companies to prepare for new tensions with the Beijing regime.
Australia's relations with China were complicated after Canberra banned Huawei from its 5G broadband network in 2018 and cooled further after the government called for an independent investigation into the origins of COVID-19. Beijing responded by imposing tariffs on Australian staples, such as barley, wine, and grapes.
"It's no secret that China has recently tried to target Australia's economy," Frydenberg said in a speech in Canberra, calling the actions "political pressure. "
"I am not minimizing the impact of China's actions. They have hurt specific industries and regions significantly in some cases. However, the overall impact on our economy to date has been relatively modest," said Frydenberg at the Australian National University. "This is perhaps surprising to many."
Although trade between China and Australia fell by about A $ 5.4 billion ($ 4 billion) in the first half of 2021, compared to the previous year, Frydenberg said that an increase had offset mainly loss. Of 4,400 million Australian dollars (3,270 million dollars) with the rest of the world.
"Australian coal, which would otherwise have gone to China, has found buyers in other markets, such as India, South Korea, and Taiwan," he said, adding that Australian barley had found a new market in places like Arabia. Saudi. The Chinese government imposed tariffs of up to 80% on Australian barley in May 2020. Frydenberg said Australia also had lucrative relationships with the United States, Japan, and South Korea. He noted that China ranked sixth in terms of foreign direct investment in Australia.
The treasurer and MP for the Liberal Party said that, while still hoping for a "constructive relationship" with China in which both countries benefit, he warned Australian companies that they should be aware that "the world has changed.
Frydenberg said that companies must seek new markets, which have opened as a result of recent free trade agreements: "Increased strategic competition is the new reality we face, now and probably in the future."
Australia's $ 2 trillion economies is at risk of entering its second recession in as many years as its largest states are in prolonged COVID-19 shutdowns.
Despite diplomatic tensions, exports to China reached a record 19.4 billion Australian dollars in the 12 months to July 31, 72% more than in the previous period, thanks to strong demand for iron ore.