Return of Australian timber to China gives hope for more trade

Shipping containers are stacked at a port in Tianjin, China, on Jan 16, 2023. (PHOTO / AP)

Australian officials welcomed the announcement that China had lifted its ban on the import of Australian timber, which is being seen as a further sign of a thaw in relations that experts said hints at an end to a similar ban on wine.

Since 2020, Australia's A$1.6 billion ($1.06 billion) annual timber trade with China had been suspended, with Beijing citing quarantine risks.

The lifting of the timber ban on May 17 comes a month after Canberra agreed to suspend its appeal to the World Trade Organization over Chinese government tariffs on Australian barley. 

That agreement came just before the international body was due to hand down a finding over the dispute.

The announcement comes on the heels of Australian Trade and Tourism Minister Don Farrell meeting with his Chinese counterpart in Beijing on May 13 and 14.

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Australian Foreign Minister Penny Wong said at a press briefing that since the government of Prime Minister Anthony Albanese was elected a year ago it had been engaged in rebuilding relations with China.

Commenting on the lifting of the ban on timber, Farrell described it as “great news” for timber exporters in Australia.

Government data released on May 4 showed exports of Australian goods to China hit A$19 billion in March, a rise of 31 percent from a year earlier and pipping the previous peak from mid-2021

Professor James Laurenceson, director of the Australia-China Relations Institute (ACRI) at the University of Technology Sydney said the timber announcement was further indication that relations were improving between the two countries.

“We have already seen a lifting on coal, copper and cotton imports from Australia,” he told China Daily. “Talks are continuing on barley, and I expect we will see an announcement quite soon on that ban being lifted.”

He said timber, wine and lobster exports to China were hard hit by the bans, adding that he expects tariffs will be lifted on wine.

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Wine Australia’s General Manager of Marketing Paul Turale said that before the introduction of significant tariffs on Australian wine to the Chinese mainland in November 2020, the market was Australia’s top export market by value and Australia was the top wine importer to the mainland. 

“While value continued to grow steadily until the tariffs came into effect, we had seen some softening of the total imported volume in the previous two years as wine consumption in the Chinese market found its equilibrium. 

“Since that time, the total market demand for wine across China has declined further.”

An employee works as Australian-made wine (on display shelves on right) are seen for sale at a store in Beijing on Aug 18, 2020. (PHOTO / AFP)

He said the growth in sales of Australian wines to the Chinese mainland did not happen overnight and fortunately Australian wine companies developed and cultivated close relationships with importers, buyers and consumers in China. These relationships remain today, ready to be rekindled should the opportunity allow, he added.

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“The Australian wine community remains cautiously optimistic that many old friendships will ensure a smooth and successful transition for our wineries and brands to reengage with the Chinese market, where trade and consumers know that they can trust the quality and authenticity of our products, as well as it being a perfect match for local cuisines,” he said.

Australian Forest Products Association (AFPA) chief executive Joel Fitzgibbon said the industry was pleased by the announcement.

“When the ban came into effect more than two years ago it caused a great deal of upheaval and uncertainty for many timber exporters and the broader forest sector, and this resolution is welcomed,” Fitzgibbon told ABC on May 18.

“AFPA and log exporters have worked closely with the Albanese government, especially Trade Minister Don Farrell, and the former Coalition government on this issue, and we thank them for their efforts helping to resolve the quarantine issues that China faced importing logs from Australia."

Despite the restrictions placed on certain goods, Australia’s exports to China surged to record highs in March thanks mainly to iron ore and thermal coal exports.

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Government data released on May 4 showed exports of Australian goods to China hit A$19 billion in March, a rise of 31 percent from a year earlier and pipping the previous peak from mid-2021. 

Shipments of thermal coal surged 125 percent by volume in March from February, offsetting a drop in exports to Japan.

Beijing effectively ended an unofficial ban on Australian coal in January, allowing customs clearance for the first time since 2020, when it launched trade curbs on a series of Australian products.