Australia’s outlook is strong despite Chinese tensions

Article Excerpt

China is the largest destination for Australian exports, taking 40% of all exported goods including iron ore, coal, natural gas, food, and precious metals. Australia supplies over 60% of China’s iron ore imports, almost half its liquefied natural gas imports, and around 40% of coal imports. Relations between the two countries began to deteriorate in 2017 with Australia speaking out about China’s actions in the South China Sea. It also effectively banned Huawei from involvement in its 5G networks. The COVID-19 pandemic created further tension between the countries when Australia called for an international inquiry into the origins of the virus. In retaliation, China slapped an 80% tariff on Australia’s barley exports and banned several Australian abattoirs from supplying meat . At the same time, Chinese power plants stopped buying Australian coal. Nonetheless, despite these trade restrictions, Australian exports to China still increased by 15% in 2021 to their highest ever level. Australia also managed to find alternative markets for the most important exports impacted…

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