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China attacks Aussie wine again as tensions heat up: Here’s what’s happened

Jessica Yun
·4-min read
Australian wine featured in Chinese bottle stores. (Source: Getty)
Australian wine featured in Chinese bottle stores. (Source: Getty)

China has launched a second attack on Australian wine, a popular Australian export, in a move that political experts have said is the state’s way of expressing political displeasure.

On Monday, China’s Ministry of Commerce said it would launch an anti-subsidy investigation into Australian wines in containers of two litres or less.

It said it would investigate 37 Australian wine subsidy schemes off the back of a request from the China Wine Industry Association.

The announcement comes two weeks after it began an anti-dumping probe into Australian wine that accused Australian winemakers of crowding the market with cheap wine to edge out local producers.

China is Australia’s largest international buyer of Australian wine, accounting for more than a third of Australia’s $3 billion wine exports.

Tensions between the two countries have been escalating ever since April, when Canberra called for an independent international inquiry into the origins of Covid-19, which was backed by more than 100 member states of the World Health Organisation (WHO).

In May, Beijing imposed tariffs on Australian barley and suspended beef imports, and then dealt Australia a new blow in early June by warning its citizens against travelling to Australia due to a “significant increase” in racist attacks on “Chinese and Asian people”.

Australian wine, per bottle, is on average the second-most expensive on the market.

Trade Minister Simon Birmingham rejected allegations on Monday and said Australia was not alone among countries experiencing trade tussles with China.

“I'm very concerned that many of [the trade issues] lack what I think is substance in terms of the claims that are made. And that's why we're working so hard to defend our wine industry, indeed all of our exporters who engage very much on commercial terms in the way in which they operate in China or any other nation,” he said on the Today show.

But despite the tension, Birmingham said trade volumes between the two countries were “very, very significant and far higher than they were in previous years”.

But Australian values were “not for sale”, he added.

“We will always defend our interests and Australia's security interests in particular – but that we wish to retain constructive relationship with China,” he said.

“We respect their sovereignty and we simply ask for that to be reciprocated.”

Birmingham signalled Australia was willing to enter discussions with China over the trade disputes.

“We wish to continue to work through those difficulties and it’s why dialogue would be very important and very helpful.”

‘Economic statecraft’, ‘coercive diplomacy’: China experts

Trade and diplomacy expert and Perth USAsia Centre CEO Gordon Flake said the anti-subsidy investigation was an example of China’s “economic statecraft”.

“It’s part of a broader series of Chinese responses around the world where Australia isn’t unique, this is really economic statecraft, it is China using economic levers to express their displeasure on political developments,” Flake told 2GB.

“At this point you’re hard pressed to find a country in the world that isn’t having some level of dispute with China.”

The Australian Strategic Policy Institute, a defence and strategic policy thinktank, today issued a paper that tracked 152 instances of China’s “coercive diplomacy” over the past decade that stretched across 27 countries as well as the European Union.

Australia is among some of the countries that have received the most instances of China’s “coercive diplomacy”, according to the paper.

“The CCP’s coercive tactics can include economic measures (such as trade sanctions, investment restrictions, tourism bans and popular boycotts) and non-economic measures (such as arbitrary detention, restrictions on official travel and state-issued threats),” the Institute said.

“These efforts seek to punish undesired behaviour and focus on issues including securing territorial claims, deploying Huawei’s 5G technology, suppressing minorities in Xinjiang, blocking the reception of the Dalai Lama and obscuring the handling of the Covid-19 pandemic.”

China’s economic clout on the global stage affords it significant leverage, the Institute noted, and the state’s ‘coercive’ acts hit harder the more a country is economically dependent on the Communist state.

“The economic, business and security risks of that dependency are likely to increase if the CCP can continue to successfully use this form of coercion.”

–with agencies

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The All Markets Summit returns on Thursday 17 September 2020.
The All Markets Summit returns on Thursday 17 September 2020.