Beijing’s politically motivated trade war against Australia barely affected the overall economy, highlighting that trade with China may not be as economically essential as it appears to the country.
Most notably, real GDP decreased by a mere 0.009 percent. Meanwhile, the greatest impact was on the output from the primary production sector, which fell by 1.4 percent.
The Chinese Communist Party (CCP) imposed $20 billion worth of trade impediments on a number of goods in 2020, including coal, wine, barley, beef, lobster, timber, and cotton, in retaliation of the former Morrison governments’ tough-on-CCP policies, including demanding independent investigations into the origins of the COVID-19 pandemic.
While exports for wine and lobster were particularly affected as the industries struggled to diversify as successfully as other affected industries, the trade impediments did not impose any significant economy-wide costs on Australia.
“While these measures do not appear to have imposed substantial costs on the Australian economy as a whole, some businesses paid a heavy price,” the report said.
Lobster exporters were exceptionally concentrated on the Chinese market. Since working to enter new markets, including Hong Kong and Vietnam, export value has begun to rebound.
Barley and coal exporters were the most successful at finding other markets, the report said, while noting that despite trade barriers, beef and wheat exports were not greatly affected.
