Australia's Barley Likely to Face 80% Tariff, Australian Farms in Emergency
Interpretation of China's 'Yi Yi Ze Yi' Strategy, Replacing Australian Agricultural Products with American Ones
[Asia Economy Reporter Cho Young-shin] The Chinese government has imposed an import suspension on Australian beef. While China cited quarantine violations as the reason for the import suspension, the Australian government interprets it as economic retaliation in response to China's accusations regarding Australia's responsibility for the novel coronavirus (COVID-19). The Chinese government is also expected to impose anti-dumping and countervailing duties on Australian barley, which is anticipated to further deteriorate bilateral relations. Some analysts suggest that China employed a 'Yi Yi Zhi Yi (以夷制夷)' strategy to replace Australian agricultural products with American ones.
Hong Kong's South China Morning Post (SCMP) reported on the 13th (local time) that the Chinese government temporarily suspended imports of meat products from four major Australian companies starting from the 12th to protect the health and safety of its consumers. Zhao Lijian (趙立堅), spokesperson for the Chinese Ministry of Foreign Affairs, stated, "Due to repeated violations of China's quarantine requirements by some Australian companies, imports are temporarily suspended," adding, "The relevant information has been communicated to the Australian government, requesting investigation and improvement."
It is known that Australia's beef exports to China account for 35% of its total beef exports. Considering that 300,000 tons of premium Australian beef were exported to China last year, SCMP analyzed that Australian livestock farmers are likely to suffer significant damage. SCMP also reported that the Chinese government is considering import restrictions on barley. Barley is one of the top three agricultural products Australia exports to China, with about half of Australia's annual production exported to China. If China imposes anti-dumping (73.6%) and countervailing (6.9%) duties on Australian barley, Australian farmers would face devastating losses.
SCMP also referenced past cases of China's economic retaliation. In March last year, China blocked imports of Canadian canola citing pest detection as the reason. The Canadian government regarded this as economic retaliation by China following the arrest of Meng Wanzhou, Huawei's Chief Financial Officer (CFO). In 2010, shortly after political activist Liu Xiaobo was awarded the Nobel Peace Prize, China restricted imports of Norwegian salmon.
Conscious of this atmosphere, spokesperson Zhao emphasized, "The COVID-19 responsibility theory and the suspension of Australian beef imports are unrelated." SCMP also conveyed interpretations that the Chinese government took strategic measures against Australia, which sided with the U.S. in blaming China for COVID-19. This is seen as a kind of Yi Yi Zhi Yi strategy to replace Australian agricultural products with American ones.
Wei Huan, an international economic lawyer at the University of New South Wales Law School, said, "Under the Phase One trade agreement between the U.S. and China, China must purchase $12.5 billion worth of American agricultural products in 2020 and $19.5 billion in 2021," adding, "Economic retaliation against Australian agricultural products can be interpreted as a measure considering multiple factors." This means it could serve as economic retaliation against the Australian government through import restrictions, improvement of relations with the U.S. government by complying with trade negotiations, and potentially create discomfort between Australia and the U.S.
Meanwhile, regarding the beef import suspension, Australian authorities stated, "China's recent action appears to be based on highly technical issues," but added, "We will seek solutions with Chinese officials and the relevant companies to normalize the situation as soon as possible."
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