Chinese trade sanctions against Australia: Quantifying the impact

Ron Wickes

Australian Economic Papers, 2024, vol. 63, issue 2, 220-236

Abstract: Australian exports of important goods have been hit by sanctions imposed by the Chinese Government in recent years. This paper seeks to estimate the losses to Australian exports from these sanctions. Commodities affected include coal, copper ores and concentrates, frozen beef, wine, cotton, barley, rough wood, rock lobster and hay. Based on declines in Australia's share of the import market for the sanctioned commodities, the paper finds that gross export losses to Australia in the China market rose from AU $3 billion in 2020 to AU $31 billion in 2022 at current prices. This differs appreciably from previous estimates. Net losses, which take into account the diversion of sanctioned trade to third country markets, are estimated, very approximately, at AU $11 billion in 2022 and at AU $20 billion over 2020–2022, at 2019 prices. Future losses in the China market will depend heavily on whether the recent improvement in relations between the Australian and Chinese Governments can be maintained. It will also depend on the intensity of US–China tensions since they will tend to shape Australian responses to issues of interest to China. Business commitments to new customers in third country markets, and assessments of the risk that the Chinese market will close again are likely to be among other factors.

Date: 2024
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