Time for Australia to 'Diversify Trade Relationships:' Queensland Senator

Comment follows recent post from Beijing of doctored image of Australian soldier

Time for Australia to 'Diversify Trade Relationships:' Queensland Senator
An undated photograph released by Rio Tinto shows high grade iron ore in Western Australia's Pilbara region, destined for China on Sept. 4, 2009. (Christian Sprogoe/AFP/Getty Images)
Caden Pearson

Queensland Nationals Senator Matt Canavan thinks the Australia-China relationship "will never be the same" and Australia should find other trading partners.

"The way the Chinese government has been acting is not one of a friend. We shouldn't want to stay in business with that type of government and country for too long," Canavan told Nine's Today Show on Wednesday.

His comments came after a top Chinese official posted a doctored image on Twitter of an Australian soldier slitting the throat of an Afghan child.

Canavan said that it was time for Australia to "diversify trade relationships."

He admitted, however, that it would "be ideal if we could go back to how the relationship was, but I fear that's not going to be the case," he said.

"What we must now do is to as soon as possible diversify our trade relationships to find business, to create business with friends not bullies," he said.

Meanwhile, Federal Treasurer Josh Frydenberg said on Thursday that Australia's iron ore exports have underpinned China's economic growth and the country needs Australian trade.

"Trade is mutually beneficial; that's why it takes place. It's good for the buyer and its good for the seller, and it helps create jobs," Frydenberg told 2GB radio on Thursday.

"Our trading relationship has been good for China's economic growth," he added.

China's imports of Australian iron ore have continued unabated during the pandemic and throughout the targeted trade disputes, reaching a record high in October, with China purchasing 81 percent of Australia iron ore export—earning Australian iron ore producers nearly $11 billion.
 Chinalco would have gained up to 50 percent of Rio's prized Pilbara iron ore mine if its deal with Rio Tinto had gone ahead. (Greg Wood/AFP/Getty Images)
Chinalco would have gained up to 50 percent of Rio's prized Pilbara iron ore mine if its deal with Rio Tinto had gone ahead. (Greg Wood/AFP/Getty Images)

While China is Australia's largest trading partner, since taking office the Morrison government has set up free trade agreements with "a whole host of countries."

"We have a breadth of trading relationships. Japan and Korea have been steadfast partners for us for decades. Indonesia is a very important trading partner for Australia too," Frydenberg said.

But Frydenberg noted the trading relationship with China is the most important because "it's also a mutually beneficial one because our iron ore, for example, has helped underpin their economic growth."

For this reason, Australia would be "very willing" to engage in "respectful bilateral dialogue with China" while also reserving the right to pursue trade issues through multilateral forums.

James Laurenceson, director of the Australia-China Relations Institute (ACRI) at the University of Technology Sydney, agrees that iron ore trade is mutually beneficial for China and Australia.

"That’s why in the first ten months of this year, the total value of goods exports to China was only down by 1.3 percent on the same period last year, which was a record high," Laurenceson told The Epoch Times. "Goods exports to all other countries are down by 11.9 percent."

"In other words, despite all the tensions and headlines, in aggregate, trade with China is proving resilient," he said.

Laurenceson believes that this means Australian producers are not in a weak position when it comes to China. He said that although the seafood industry is currently suffering, both the barley and beef industries have found success in other markets.

"The takeaway is that even as China seeks to hurt Australian producers, these producers are not defenceless and can sometimes effectively mitigate the risk," Laurenceson said.