https://www.scmp.com/comment/opinion/article/3139632/how-five-eyes-allies-eat-australias-lunch-over-china-trade"While the “Five Eyes” English-speaking nations have put up a rhetorical united front against China, they have been eating each other’s lunch in their China trade. The biggest loser has been Australia, the most confrontational with Beijing after the United States, but also the most reliant on trade with the Chinese.
As Washington denounces China’s “economic coercion” against Australia, the US and Canada have found it too hard to resist the opportunities to substitute Australian supplies with their own goods. US exports to China of wine, cotton, log timber, wood and even lobsters all rose significantly in the past year as Beijing either held up product shipments or rejected them from Down Under.
The most impressive has been coal, with American exports rising from practically zero to become a significant supplier since late last year. According to a new report by Australia’s Department of Industry, Science, Energy and Resources, US coal has continued to take over Australia’s share in the Chinese market, followed by Canada and other global coal exporters including Russia, Mongolia, Colombia and the Philippines.
The report notes that Canadian coal and related products are increasingly drawn to China, as the latter seeks substitutes for Australian production. While Australia has been diversifying coal exports to other countries, with India being a potential big buyer, the new trade has been slow primarily because of the recent coronavirus outbreaks in the country.
As Aussie coal exports to China dropped to almost nothing, US supplies rose from nearly zero in October to 300,000 tonnes in February, 1 million tonnes in April and 720,000 tonnes in May.
Meanwhile, as Australia’s barley exports to China dropped, Beijing appears to have eased its informal trade sanctions against Canada. From last August to February this year, Canadian barley exports to China rose to 2.2 million tonnes, more than doubling the previous harvest between August 2019 and July 2020, the period that marks the crop year.
Canada’s dispute with China is easier to resolve. It centres around the Canadian detention of Huawei executive Meng Wanzhou, who is fighting extradition to the US, and the Chinese detention of Canadians Michael Spavor and Michael Kovrig for alleged espionage.
Australia’s problems are rooted in the goals and direction of its trade and foreign policy vis-à-vis China. How long will it play the proverbial sucker before Australian producers say, “enough is enough”?
This article appeared in the South China Morning Post print edition as: Allies get fat as Australia loses China trade"
