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Australian Treasurer Says Economy Must Diversify From China Reliance

With trade tensions expected to continue, Frydenberg advised businesses to look at new markets opened as a result of recent free-trade agreements.

Australian Treasurer Josh Frydenberg. File photo: Reuters.

 

Australia must diversify its economy to rely less on China, its largest trading partner, Treasurer Josh Frydenberg said on Monday, as he warned businesses to brace for new tensions with Beijing.

Australia‘s relations with China soured after it banned Huawei from its 5G broadband network in 2018 and cooled further after Canberra called for an independent investigation into the origins of Covid-19, first reported in China last year.

Beijing responded by imposing tariffs on Australian commodities, including barley, wine and grapes.

“It is no secret that China has recently sought to target Australia‘s economy,” Frydenberg said in a speech in Canberra.

“Heightened strategic competition is the new reality we face, now and likely into the future.”

Frydenberg said businesses should look at new markets, which have been opened as a result of recent free-trade agreements.

Australia‘s A$2 trillion economy is at risk of entering its second recession in as many years as its largest states are in prolonged Covid-19 lockdowns.

Despite the diplomatic tensions, exports to China hit a record A$19.4 billion in the 12 months to July 31, up 72% from the prior 12-month period on the back of strong iron ore demand.

 

• Reuters and Jim Pollard

 

ALSO SEE:

Australia boosts iron ore exports as trade shrugs off China bans

Australian prime minister slams China over trade bullying

 

Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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