Why China needs Australia’s lifeline for exports

An expert in economics said China and Australia “need” each other, as Beijing continues to avoid Australian trade.

China’s meat imports are up 21% from the same period last year, but Australia is absent with two slaughterhouses still on Beijing’s banned list.

Argentina and the United States are currently meeting Chinese demand for meat.

Imports of Australian beef into China are subject to restrictions. (Paul Harris / The Age)

Tim Harcourt, professor of economics at the University of Technology Sydney, said today the restrictions were costing Australia as meat exports fell by around 30%.

However, Professor Harcourt said China “still needs” Australia.

“They have a billion people. They need food security. They need food,” he said.

“They need energy to power their huge industrial engine and they need a good quality education.

“300 million middle-class parents, very ambitious for their children, they need an Australian education. So the answer is yes, they need us, and we need them.”

Australian iron ore delivered to Suzhou, China (Getty)
Australian iron ore remains a vital Chinese import. (Getty)

As China continues to buy Australian iron ore in large quantities, Professor Harcourt said Beijing’s apparent commitment to cut emissions is an opportunity for Australian industry.

“I suspect there will be a lot of environmental technology and resources between Australia and China in the future as we become a green energy superpower,” he said.

Currently, around 70 percent of Chinese iron ore is imported from Australia’s Pilbara region.

And Professor Harcourt said in the short term that the addiction is likely to continue, especially as China’s Belt and Road program has stalled in Africa.

“That’s why, I think, you’ve seen beef, barley, and wine banned from China, but they’re not going to touch the iron ore. They need it,” he said.

Chinese President Xi Jinping has presided over a newly assertive China. (PA)

Professor Harcourt also pointed out that Australia was not the only country in the world to fight Beijing’s discontent.

“They are angry with everyone. They fought with the Czech Republic, Ecuador, the European Union, the United States, Korea, Japan,” he said.

“They fight with everyone but naturally we focus on the one with us because what we know.”

And he stressed that the benefits of the cordial relations between Beijing and Canberra go both ways.

“At the end of the day, the business relationship with us is very important to them, so it’s not going to be very profitable for them economically at all,” Professor Harcourt said.

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