Australia & China: Talks under way to end trade disputes, Beijing confirms

Beijing has opened the door for bilateral talks to begin resolving trade disputes that have crippled A$20 billion of Australian exports, if the Albanese government abandons its World Trade Organisation challenges, China’s top diplomat in Australia has revealed.

Ambassador Xiao Qian said Australian and Chinese trade negotiators in Geneva had begun discussing the possibility of Australia dropping its WTO challenge to punitive tariffs on barley and wine, saying such a move would be a “good idea”, AFR reported on January 10.

“Bilateral is much easier to find a solution instead of going through the multilateral forum,” he said during a 90-minute press conference in Canberra on Tuesday.

“I want to emphasise there are [trade] concerns from both sides,” a reference to Australia’s anti-dumping tariffs on steel goods and curbs on Chinese foreign investment.

Trade Minister Don Farrell has repeatedly indicated his willingness to hold bilateral talks as an “off-ramp” to resolve what he has described as trade “blockages”.

Despite the recent easing of tensions between Canberra and Beijing, Mr Xiao said further goodwill was needed to end trade disputes, although he indicated Chinese authorities would notify Chinese companies and consumers of improved relations.

“We did that when we had a bad relationship. We have to tell our companies we are having some problems with this country politically, you have to be careful ... and when we have an improvement in relations we also notify our companies and the people in China,” he said.

While Mr Xiao did not confirm media reports last week that China’s powerful National Development and Reform Commission had given approval to four major Chinese firms to import coal from Australia again, he hinted the unofficial ban was coming to an end.

“It’s for the companies to make their own decisions,” he said.

While Mr Xiao generally painted a rosy picture of the improved bilateral relationship, he took a broadside at Australia’s key security partnerships, saying the acquisition of nuclear-powered submarines was a waste of taxpayers’ money while Canberra should be wary of getting too close to Japan because it was the only country that historically threatened to invade Australia.

Mr Xiao spoke to a large contingent of Australian journalists, as well as Chinese media outlets, at the Chinese embassy on Tuesday for what was billed as a “New Year’s Press Gathering”, taking questions for more than an hour.

He was upbeat about the health of the Chinese economy but defended the Communist government’s abandonment of its heavy-handed approach to managing COVID-19.

Mr Xiao said Labor’s election victory in May had been a catalyst for repairing the bilateral relationship, although he cautioned it remained at a “critical stage” despite beginning to turn around.

Mr Xiao dismissed as “so-called sanctions” China’s unofficial bans on a raft of Australian goods such as coal, lobsters and timber. China has never acknowledged it blacklisted Australian goods with the exception of wine and barley, which were hit with hefty tariffs ostensibly because they were undercutting Chinese producers.

He said it was not a “good idea” for Australia, the United Kingdom and United States to be “targeting China as a potential threat or adversary” under the AUKUS agreement.

Mr Xiao said nuclear-powered submarines were an “even worse idea” because they were “not a conventional weapon” and complicated to build.

“If this government, if this country really spends money to achieve nuclear submarines, it is going to be an unnecessary consumption of the Australian taxpayers’ money,” he said.

He also repeated Beijing’s criticisms that the project breached nuclear non-proliferation treaty and set a bad precedent for other countries to acquire weapons grade uranium.

Mr Xiao’s comments come after Prime Minister Anthony Albanese and Defence Minister Richard Marles last week insisted the submarine project was on track after a leaked warning from two influential American senators that supplying Australia with submarines could stretch the US industrial base and harm the delivery of submarines to the US Navy.

Mr Xiao also rebuked Japan’s ambassador to Australia, Shingo Yamagami, who has made a series of hawkish comments about China since taking up his posting. Most recently, Mr Yamagami told News Corp on Tuesday that “nothing fundamental” had changed on China’s part despite the easing of tensions with Canberra.

But Mr Xiao said Mr Yamagami was “not doing his job”.

“It’s not my role to base myself in Canberra while criticising a third country,” Mr Xiao said.

While Australia and Japan has significantly deepened military co-operation in recent years because of mutual concern over China, Mr Xiao dragged up World War II, when Japanese forces bombed Darwin and committed atrocities against Australia prisoners-of-war.

“I hope the Australian government and Australian people would have a clear mind about what happened and be careful about what might happen in the future. Once somebody threatens you, he might threaten you again. China has been your friend; we will continue to be your friend,” Mr Xiao said.

Mr Yamagami said Mr Xiao’s comments were “baffling and perplexing”.

“We place significant emphasis on maintaining rules-based regional and international order. If that offends my Chinese counterpart, what can I say,” Mr Yamagami told the ABC.

Asked about the prospect of freeing detained Australians Cheng Lei and Yang Hengjun, Mr Xiao pleaded for patience.

“I hope the solution will come as soon as possible, but we need to respect the legal process,” he said.

Mr Xiao denied China was not being transparent over sharing COVID data globally, a criticism Australia and other western countries have used to justify the introduction of testing requirements for travellers from China, Hong Kong and Macau.

Mr Xiao said the outbreak was “under control” in China and noted that all countries during the pandemic had faced challenges as they transitioned to reopening their economies.

Repudiating doomsday predictions, Mr Xiao expressed confidence in the Chinese economy, saying there were three years of pent-up demand that would boost growth.

13 January, 2023