China-Australia Trade: Canberra sees strain with Beijing as China-US trade battle prolongs

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03:04

Trade tensions between China and the US have placed Australia in a difficult position. Australia is currently experiencing a strain in its relationship with China. And if China and the US smooth out their trade differences, Australian exporters could pay the price. Greg Navarro explains.

Just a few months ago, Australian wine producers were poised to take advantage of an apparent opening in the Chinese market - because of concerns over a tariff-driven trade war between China and the US.

BRUCE TYRRELL CEO, TYRRELL'S WINES "If America is put up 15% or 30% or whatever, then it just means there's another segment of the market that is available to us."

But that opening appears to have closed. Recently, some Australian wine producers have reportedly experienced difficulties getting their exports through Chinese customs.

STEVE CIOBO AUSTRALIAN MINISTER FOR TRADE, TOURISM, AND INVESTMENT "I'm mobilised, my office is mobilised, the Australian diplomatic mission here is mobilised and we will work out precisely what the situation is and if we can get to the bottom of it."

At the start of last year, Chinese and Australian officials gathered in Sydney to celebrate the strength of diplomatic ties- and boost tourism.

GREG NAVARRO SYDNEY "But since then, there have been signs that the seemingly amicable relationship is straining. And the Australian government's proposed laws to crack down on foreign influence and interference - aimed in part at China - haven't helped."

BOB CARR FORMER AUSTRALIAN FOREIGN MINISTER "I think it is pretty poor, I think it is poorer than it's been based on the evidence at any time since we have had diplomatic relations."

If China agrees to increase imports from the US, Australian wine exporters might not be the only ones experiencing difficulties.

DAVID LENNOX RESOURCE ANALYST, FAT PROPHETS "If the US wished to import LNG into China and it has got the resources and it is building the capacity to export natural gas into China, then that could become somewhat of a problem for Australia."

But experts believe China's increasing demand for natural gas will ensure a slice of its market for most foreign suppliers.

Australian beef producers - who currently send more than 20% of their total exports to China - could also be impacted. China recently lifted a 14 year ban on US beef imports.

BOB CARR FORMER AUSTRALIAN FOREIGN MINISTER "China takes one third of Australian exports, we are very dependent on exporter services to China - that's students, tourism, it's growing. It's a large part of Australia's economic future."

Last year, Australian exports to China were worth nearly $100 billion AUD.

That may help to explain why Australia's government has made attempts to smooth over any diplomatic wrinkles, including a recent visit by trade, tourism, and investment minister Steve Ciobo.

STEVE CIOBO AUSTRALIAN MINISTER FOR TRADE, TOURISM, AND INVESTMENT "The purpose of this, this is, I think, my 13th visit to China in the last three years, is to reinforce, once again in the minds of everybody, that the relationship between China and Australia is a strong relationship."

A relationship that Australia's economy has come to depend on. Greg Navarro, CGTN, Sydney.