The China-Australia Trade Thaw Could Extend to Wine and Lobster

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China’s trade restrictions on Australian wine, lobsters, and other commodities could be the next to ease amid a warming of diplomatic ties between the two countries.

China recently announced a resumption of coal imports from Australia, signalling a possible thawing of tensions that have been building for months.

According to Hans Hendrischke, professor of Chinese Business and Management at the University of Sydney, any easing of commodity import curbs between China and Australia is likely to be gradual and take place unofficially.

“Nobody could tell you whether it will start with barley, wine producers or lobsters for Chinese New Year,” Hendrischke said. 

This comes after China’s recent announcement of coal imports from Australia, which many believe signals a potential thawing in tensions brewing for months. Analysts speculate that wine, lobsters, and other commodities could be next in line for trade resumption, given their importance to both countries’ economies.

Since China began imposing restrictions on Australian imports in mid-2020, investors have largely brushed off the effects. The share price of Graincorp Ltd., a major Australian agricultural exporter to China, has surged more than 60%. This indicates that investors see the current tensions as temporary and believe that easing trade curbs between China and Australia could result in greater profits for companies like Graincorp.

James McIntyre, an Economist, said, “The boost to Australia’s economy from improving ties is unlikely to be noticeable at the macro level. The ongoing recovery in Australians holidaying overseas will offset the boost from education exports returning to pre-pandemic levels.”

Australian industry representatives are hopeful that the current “thaw” between China and Australia may end these restrictions, potentially allowing businesses to resume regular trading relations with their Chinese counterparts. This would be a welcome relief for many producers who had seen demand for their wines plummet since being hit by tariffs last year.

Both sides seem eager to resolve their differences and return to business as usual to ensure continued economic prosperity for each country involved.

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