Australia’s peak business lobby has played down concerns over Chinese economic coercion, saying increased trade between the two nations is actively encouraged.
Business Council of Australia chief executive Bran Black said business leaders should continue to pursue diversification as an “inherent good in and of itself” while also strengthening ties with China.
Australia’s economic reliance on China was exposed during the COVID-19 pandemic, when Beijing imposed restrictions across $20 billion worth of key exports over political grievances with Canberra.
At the time, Australia pursued a policy of trade diversification, successfully making up much of the trade shortfall with increased exports to countries such as Japan, South Korea and India.
But since a thaw in relations with Zhongnanhai following Labor’s election victory in 2022, trade between Australia and China has rebounded.
Speaking ahead of Prime Minister Anthony Albanese’s meeting with Chinese President Xi Jinping in Beijing, Mr Black said the meeting would set the tone at a business-to-business level and send a signal that further engagement is welcome.
But Australian CEOs should still be encouraged to diversify because it was good for business as well as managing risk.
“So from our perspective, we say let’s try and have the best possible relationship that we can with China. Let’s try and make sure that we can establish trade opportunities that help jobs and businesses back home,” he told reporters in Beijing.
“But let’s also concentrate on the engagements that we have overseas with countries like the United Arab Emirates, countries like India, countries like those in Southeast Asia.”
A risk remains that China could once again resort to economic penalties on Australia in retaliation for political disagreements.
Speculation has emerged that Beijing could apply countermeasures if Canberra follows through on its plan to tear up a Chinese-owned company’s lease of Darwin Port.
An article by a Chinese state media-linked influencer suggested Beijing could restrict Australian imports, including iron ore trade valued at more than $100 billion, in response.
Mr Black refused to say whether businesses were concerned about blowback from the Darwin Port decision, backing the government’s right to make decisions regarding the national interest.
In a press conference on Monday, Mr Albanese said he was not concerned about Chinese retaliation.
“We had a very clear position that we want the port to go into Australian ownership,” he told reporters in Shanghai.
“We’ve been clear about it, we’ve been orderly about it, and we will go through that process.”
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