While China has eased restrictions on Australian imports after more than three years of political disputes, restoring trade has proven more difficult than initially halting it. Although a leaders meeting in late 2021 led to China relaxing coal restrictions in January, March's coal imports remained just a third of the 2016-2019 average. Traders report bureaucratic inertia, worsened economics, and competition from cheaper imports in China as contributing factors.
David Olsson, chair of the Australia China Business Council, said, "These things take time, there is no magic wand to bring everything back to normal, it will be a slow process over several months." The slow resumption of the coal trade indicates that reestablishing markets, logistics, and expectations for restricted products could take months or even years.
Despite these setbacks, Australian exports to China have increased overall, jumping from A$149 billion in 2019 to A$175 billion last year, primarily due to the booming iron ore trade. The center-left Labor government is prioritizing the restoration of unrestricted trade, with the end of coal restrictions being an early success. Both countries agreed last month to resolve a World Trade Organisation dispute over Chinese barley tariffs within three months, and Australia's trade minister is optimistic about wine tariffs following suit.
However, challenges remain, including potential shortages of Australian customs workers who certify exports, and concerns about the longevity of the diplomatic thaw. Some Australian wine, timber, and meat producers told Reuters they would not prioritize China over their new clients.
David Foote, chair of Cattle Australia, stated, "It would be short sighted to lose the hard fought new businesses we've built." Additionally, tensions between China and Australia persist, with Australia blocking a Chinese rare earth investment on national security grounds in February.
Foreign Minister Penny Wong and Trade Minister Don Farrell have both emphasized the importance of diversifying export markets, even as they work to resolve tariffs and restore trade relations with China.
