Inside Australia's thawing trade relations with China

·4-min read
Mick Tsikas/AAP PHOTOS

Australia has long been seeing red over punitive trade restrictions imposed by China, but there are positive signs Beijing will give the green light for lucrative imports to begin again.

Trade Minister Don Farrell is returning from a trip to China, where he met with his counterpart Wang Wentao and major steel producer Baowu.

Senator Farrell said he didn't go into the meeting with set expectations after previous visits to China from the assistant trade minister and foreign minister.

"I'm hoping that what we get out of this meeting is a way through in respect of all of the outstanding disputes," he told AAP.

"We're not going to solve all of these issues overnight. This is a way of us signifying to them we're serious about these issues, we want to solve them."

A slate of trade restrictions and embargoes were slapped on Australian goods at the start of 2020 after then-prime minister Scott Morrison called for an investigation into the origins of the COVID-19 pandemic, angering Beijing.

Since coming to power, Labor has been working to restore the relationship with China.

Mr Wang first extended an invitation for Senator Farrell to visit when the pair met virtually in February.

Assistant minister Tim Ayres travelled to China in the interim, but the trade minister said he didn't want to let too much time pass before visiting the Asian economic powerhouse in person.

"The virtual meeting turned out to be quite warm and friendly, but it's not the same as being in the same room," Senator Farrell said.

"You've got to build that relationship. The best way to do it is a face-to-face meeting so he gets a sense of who I am, I get a sense of who he is and we can rebuild that trust."

Top steelmaker Baowu was one of the first of the country's producers to order Australian coking coal in January following Foreign Minister Penny Wong's visit to China in late December.

The Australian government then approved Baowu's involvement in a $2 billion iron ore project with Rio Tinto in Western Australia in what Chinese government mouthpiece The Global Times called "a positive signal for mending the two countries' past fraught relationship".

Baowu chairman Chen Derong has publicly expressed interest in closer ties with Rio Tinto.

The improvement in the two countries' relationship extends back to Prime Minister Anthony Albanese's meeting with President Xi Jinping on the sidelines of the G20 summit in November.

That paved the way for the foreign ministers to meet in Beijing the following month, where it was agreed trade ministers would try to negotiate a path forward.

Defence Minister Richard Marles has also met his counterpart on a number of occasions.

Coal imports into China have resumed on a near-daily basis and there is added interest in Australian copper and cotton.

The next big step is reopening barley imports, which have been at the centre of a World Trade Organisation dispute that was recently paused as a sign of goodwill.

The government is also pushing to strip back trade barriers for Australian wine, meat and crayfish.

Opposition trade spokesman Kevin Hogan has welcomed the thawing in the relationship, but he said part of the shift came from a change in Chinese diplomacy and a realisation of the domestic costs of Beijing's stance.

"We saw what they termed their 'wolf-warrior diplomacy' a number of years ago," he said. 

"We always wanted to continue trading with them. We always wanted to continue having dialogue with them." 

Mr Hogan referred to Beijing's issuing of 14 "grievances" to the former coalition government in late 2020, which including what China said was the blocking of its firms' investments on "opaque national security grounds".

The list also accused Australia of "spearheading the crusade against China in certain multilateral forums".

Mr Hogan said Beijing had worked out that the punitive measures could hurt both sides.

"We have a good trading relationship with China. Even through this whole period, they have taken more than 30 per cent of our goods and services," he said.

"The tariffs and other barriers they put on us were illegal and I hope they maybe say, 'look, that wasn't a good idea'."