![]() ![]() The lack of diversity in Australia’s exports leaves it vulnerable to any major impact on its main sources of revenue, experts said. ![]() The trade has remained strong over the years, despite rising political tensions between Beijing and Canberra - including new legislation designed to limit foreign interference, introduced by Australia in 2017.īy 2019, almost two-thirds of China’s iron ore came from Australia, more than it imported from Brazil, South Africa and India combined, according to the Observatory of Economic Complexity.Īt the same time, iron ore made up almost a quarter of Australia’s entire exports in 2019, 81.7% of which went to China. ![]() ![]() Why are Australian officials hinting at war with China? BROWN (Photo credit should read FREDERIC J. The trip is Gillard's first to China, Australia's top trading partner, and comes at a time when the communist country is waging its toughest crackdown on dissent in years. The national flags of Australia and China are displayed before a portrait of Mao Zedong facing Tiananmen Square, during a visit by Australia's Prime Minister Julia Gillard in Beijing on April 26, 2011. “It isn’t that easy for them to get into a new round of trade wars over this particular product.” “Australia is the largest iron ore producer in the world and on the other hand China is the largest steel producer in the world,” said Heiwai Tang, professor of economics at Hong Kong University Business School. That means Australia’s largest source of trade revenue may be secure. On Thursday, Beijing announced the “indefinite suspension” of the China-Australia Strategic Economic Dialogue, which only met for the first time in 2014.īut experts said that unlike wine and coal, it would be tough for China to find new sources of iron ore any time soon. Overall Chinese investment in Australia plunged 62% in 2020.Īnd tensions are still getting worse. The Chinese government said Morrison’s request was “political manipulation,” and since then Australian exports to China have faced growing barriers to entry. Iron ore is a vital component in the production of steel, and with China embarking on a $500 billion infrastructure spending spree to help the economy recover from the pandemic, Beijing’s need for it has never been greater.ĭiplomatic relations between Australia and China fell into a deep chill one year ago, after Prime Minister Scott Morrison called for an independent investigation into the origins of the Covid-19 pandemic which threatened to challenge Beijing’s narrative of the viral outbreak. Now, one commodity is almost single-handedly keeping the trade relationship afloat: iron ore.Īustralia is the world’s largest producer of iron ore, mining more than 910 million metric tonnes in the 2019-2020 financial year, according to the Australian government, almost twice as much as its nearest competitor Brazil. If Australia exports it, China has likely put up barriers to entry over the past year, as diplomatic relations between the two countries rapidly deteriorated. ![]()
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