- In the first nine months of 2021, China imported $127.58 billion of goods from Australia, up 45.5 percent from the same period a year earlier.
- The bright spot for this growth is iron ore, for which China relies heavily on Australia.
- According to Oxford Economics, Australia has been trying to redirect exports of banned goods in China to other markets.
Exports are still increased sharply
According to China’s latest trade data, in the first nine months of 2021, China imported $127.58 billion of goods from Australia, up 45.5 percent from the same period a year earlier, despite China’s repeated restrictions on imports of goods from kangaroo country.
According to data from the Australian Bureau of Statistics, Australia’s exports to China reached a peak of A$19.4 billion in July 2021, up 72% year-on-year.
The bright spot for this growth is iron ore, for which China relies heavily on Australia. Australia’s iron ore exports in the period 2014 – 2019 reached around $300 billion and amounted to $150 billion in the 2019-2020 period. China’s action to cut steel production to reduce emissions caused iron ore demand in the first 9 months of 2021 to have a slight decrease of 3%. However, Australia still holds the position of China’s largest LNG exporter, providing up to 60% of iron ore needs.
Australia’s exports to China are increasingly high due to rising commodity prices, offsetting the damage from Beijing’s restrictions on commodities such as wine, beef, barley, coal, seafood, etc.
Australia’s response to China punishment
In a statement to the World Trade Organization, Australia criticized China’s trade sanctions. The WTO has also agreed to set up a panel to look into China’s tariffs on Imported Australian wine.
According to Oxford Economics, Australia has been trying to redirect exports of banned goods in China to other markets.
China is still imposing restrictions on coal. Therefore, Australia’s exports to some markets in India, Japan and South Korea have skyrocketed.
Coal exports to India in July and September 2021 reached about 6.4 million tons and 3.8 million tons, respectively. In June 2021, coal exports to Japan saw a remarkable increase of about AUD 324 million compared to the previous month. At the same time, coal export revenue to South Korea also increased to AUD 172 million. In the 2020-2021 financial year, Japan and South Korea are the two largest export markets of Australia.
Although China has taken many measures to restrict the import of Australia, the total value of Australian goods exports to China has significantly increased.