Punitive Measures Against Australia: China’s Economic Vengeance

For years, human rights criticism from Australia has been a thorn in the side of China. But when the country also called for an investigation into the origin of the coronavirus in 2020, Beijing started an economic campaign of revenge.

“Such a beautiful lobster!” Enthuses Francis Wong from the Australian-Chinese business association in Adelaide. “The rich and beautiful in China love him. This red alone – wonderful! This is a holiday meal! “ Wong visits the check-in hall of Hummer dealer Andrew Ferguson. Customers in Beijing or Shanghai pay the equivalent of up to 220 euros for a single living lobster. Normally.

Because now the two business partners are desperately looking for new customers. From China it has been said since November: The Australian lobster is too heavily contaminated with heavy metals such as cadmium. Ferguson has never seen proof of this: “I thought that was strange. All sorts of countries import this type of lobster, but the one from Australia is the one that is being objected to. Although we keep testing ourselves and have been delivering there for years.”

Punitive tariffs of more than 200 percent

The Barrosa Valley with its famous Shiraz and Cabernet Sauvgnon grape varieties is an hour’s drive away: 40 percent of exports went to the Middle Kingdom by 2020. However, since last year China has been accusing Australia of price dumping. The result: punitive tariffs of up to 212 percent. “This is complete nonsense,” says John Geber from the Chateau Tanunda winery. “We in Barossa don’t dump prices – and our winery certainly doesn’t. Our wines cost up to $ 500 a bottle.”

Large wineries can cope with this, while smaller ones are driving this policy economically to the brink. Hamish Seabrock has a lot of time to mix his cuvees at the moment. His wine distribution was aimed exclusively at China, but the punitive tariffs make the wine so expensive that it can no longer be sold. The winemaker had to store 60,000 bottles.

The punitive tariffs are to apply for five years. Seabrook is outraged, including by his own government, which is sacrificing companies like his for foreign policy: “The Australian government should remember that we are just a small fish in a pond. We have to be politically composed and our words wise choose and don’t make too much of a fuss. ”

Rocked up over the years

In addition to lobster and wine, barley, beef and other products are also affected. Agricultural scientist Scott Waldron studied and worked in the Middle Kingdom. And he saw the problems coming: Australia’s loud sympathy for democracy and freedom in Hong Kong and Taiwan. Such behavior does not leave China unpunished.

The whole thing has rocked up over the years, says the China expert. But when Australia in 2020 openly calls for a commission of inquiry into the origins of the coronavirus, Beijing feels duped and is determined to make an example – far beyond Australia. “The main motive is, of course, to change Australia’s foreign policy through economic coercion. But it should also be a warning to other countries,” says Waldron. “In Chinese they say: ‘Kill the chicken to scare the monkeys.’ In this case, Australia is the chicken and countries like Germany are the monkeys that watch it. ”

Diplomatic ice age

But the government in Canberra does not want to back down. She has referred the case to the World Trade Organization for clarification. Diplomatic Ice Age, but Trade Minister Dan Tehan emphasizes: “We absolutely want constructive relations. That is why I wrote to my Chinese colleague and suggested that we discuss the whole thing personally. I sent the letter in January and am still waiting for an answer.”

China expert Waldron believes that Australia can afford to wait. The Middle Kingdom is still dependent on raw materials and products from Australia, he says. Therefore, exports to China in 2020 decreased only slightly overall. But the country shouldn’t be intimidated by the power player China. “China has not adhered to international norms for a long time and in many areas. It is in Australia’s interests that international laws are complied with – whether it is in the South China Sea, on human rights or in trade. That is in Australia’s long-term interest.”

Although individual companies Down Under are economically sidelined, Australia is currently determined to stand up to the Middle Kingdom.