China Announces Suspension of Ministerial Economic Dialogue with Australia
In a move that highlights Beijing’s growing frustration with Canberra, China has announced that it will indefinitely halt all activities under the China-Australia Strategic Economic Dialogue. The National Development and Reform Commission (NDRC) made this decision in a statement released on Thursday.
Background: Deteriorating Relations Between China and Australia
The two nations have been experiencing strained relations for years, but tensions have escalated significantly over the past year. China has blocked or tariffed several imports from Australia after Canberra sought a probe into the origins of the coronavirus pandemic. Last month, Australia decided to cancel agreements between China’s Belt and Road Initiative (BRI) and Victoria state.
Economic Implications
The suspension of the economic dialogue is seen as a symbolic move by Beijing. However, it has significant implications for both countries. The Australian dollar pared earlier losses after the announcement, but was still down 0.2 percent at 77.34 US cents at 3:38 p.m. in Sydney.
China’s dominance of Australian trade continues to increase, with the proportion of Australian exports to China surging to 43 percent by the end of 2020. The key factor behind this trend has been the relentless rise in the price of iron ore, driven by China’s early emergence from COVID-19 and strong demand for steelmaking ingredients.
China’s Reprisals Against Australia
China’s reprisals against Australia have affected a range of commodities, including coal, beef, barley, and lobster. The duties imposed on Australian wine in November 2020 effectively shut access to the market, but strong European sales helped counter the slump.
The key danger ahead for Australia’s economy relates to international education and tourism, which are currently frozen due to international border restrictions. China accounted for 37 percent of Australia’s A$10 billion-a-year foreign student market and Chinese tourists spent A$12.4 billion in the country in 2019, accounting for 15 percent of arrivals.
Cold-War Mindset Blamed by NDRC
The NDRC blamed Australian government officials for working to "disrupt normal exchanges and cooperation between China and Australia out of a Cold War mindset and ideological discrimination." This move has been seen as an attempt by Beijing to deflect blame from its own actions in the deteriorating relationship.
Impact on Trade and Economic Growth
The suspension of the economic dialogue is likely to have significant implications for trade and economic growth. The impact will be felt not only in Australia but also in China, which relies heavily on Australian exports.
As the world’s second-largest economy, China’s dominance of global trade continues to grow. However, its actions in the face of deteriorating relationships with key trading partners like Australia have raised concerns about the stability of global supply chains and economic growth.
Conclusion
The suspension of the China-Australia Strategic Economic Dialogue is a significant development in the ongoing saga between China and Australia. The move highlights Beijing’s growing frustration with Canberra, but it also has significant implications for trade and economic growth. As tensions continue to escalate, both countries must consider the long-term consequences of their actions.
Recommended Articles
- As Germany and France Dither, Canada Among Group of English-Speaking Nations Confronting China: A discussion on how Canada is navigating its relationship with China amidst growing tensions.
- Canada’s New Approach to China Must Do More Than Just Make Us Feel Good: An analysis of Canada’s approach to dealing with China and the importance of a more robust strategy.
- Opportunity vs Threat: Canada’s Unpredictable and Sometimes Irreconcilable Relationship with China: A examination of the complex relationship between Canada and China, including both opportunities and challenges.
Sources
- Bloomberg.com: A comprehensive news source providing up-to-date information on global markets, economies, and politics.
- The National Development and Reform Commission (NDRC): The NDRC is responsible for formulating policies related to economic development, trade, and investment in China.