CANBERRA, AAP – Josh Frydenberg says the Australian economy has proved to be remarkably resilient in the face of political tensions with China, the nation’s number one trading partner.
In an online address on Monday, the treasurer likened China’s stance to last century’s Cold War, but with some key differences this time around.
The global economy and trading is now highly integrated, and while the Soviet Union during the Cold War was largely cut off from the rest of the world, China has increased its dominance.
And while flexing its power, Mr Frydenberg said China has made no secret of targeting Australia’s economy.
The Asian giant has cited 14 grievances, covering everything from Australia’s foreign investment laws to its calling out of cyber attacks.
“They have targeted our agricultural and resources sector, with measures affecting a range of products including wine, seafood, barley and coal,” Mr Frydenberg told the ANU Crawford Leadership Forum.
But he said Australia has remained steadfast in defending its sovereignty and core values, and always will.
“Our economy has also proven to be remarkably resilient,” Mr Frydenberg said.
“I am not downplaying the impact of China’s actions. They have hurt specific industries and regions, significantly in some cases.”
However, many of the firms and industries targeted by China’s trade restrictions have also been successful in redirecting goods to other export destinations, particularly for larger bulk commodities that trade on global markets.
China’s trade actions have seen total exports to China fall by around $5.4 billion over the year to the June quarter.
“But over the same period, exports of those goods to the rest of the world have increased by $4.4 billion,” the treasurer said.
For example, over the past year Australia’s coal exports to China have fallen by around 30 million tonnes, but to the rest of the world its coal exports have risen by around 28 million tonnes.
Australian barley has also been redirected, including to new markets such as Saudi Arabia.
But he warned that China’s trade actions will carry a cost to both Australia and China.
“They rob Chinese consumers of premium Australian wine, seafood and other goods,” he says.
“And they rob Chinese industry of high quality and high value inputs, such as Australian coal. We would both be better off if markets were allowed to operate freely.”
He said Australian firms have pivoted, by finding new buyers for their goods and global markets.
“That is the benefit of a strong, dynamic, open, market-based economy,” Mr Frydenberg says.
“A precondition for our prosperity and something we should always seek to protect, preserve and promote.”