China’s $2billion barley payback: Communist state says Australia has NEVER ‘been friendly’

China has accused of Australia of being a ‘frustrating’ and ‘un-friendly’ trading partner, hours after it slapped a crippling 80 per cent tariff on farmers.

The Global Times, a mouthpiece for the communist government, accused Australia of ‘exploiting’ China and presenting itself ‘as a victim’.

On Monday, China announced the 80.5 per cent levy on barley exports would start on Tuesday, after weeks of threatening to boycott Australian industries. 

Australia sends between half and two-thirds of all its barley to China, making this decision a crushing blow to thousands of farmers.

Trade Minister Simon Birmingham revealed the government were given no advanced notice of China’s plans, calling it ‘deeply disappointing’.

‘From China’s perspective, Australia has never been a friendly trading partner,’ a piece in the state-run Global Times said.

‘And consultations with the country on trade issues have always been frustrating, which has apparently weakened its motivation to promote bilateral trade.

Scroll down for video 

‘The Australian government seems more interested in exploiting China’s suspension of some beef imports and its potential imposition of tariffs on Australian barley to describe itself as a victim of trade sanctions.’ 

The extraordinary tariff on Australian barley exports is an apparent punishment for Scott Morrison’s push for a coronavirus inquiry.

The Australian prime minister in April demanded an independent probe into the deadly respiratory virus and the World Health Organisation‘s handling of the crisis.

In response, Chinese state media and leaders warned of trade retribution that could wipe $135 billion from the Australian economy.

China claimed Australia was dumping barley and subsidising farmers, insisting the tariffs are nothing to do with coronavirus. 

‘We learnt through the official notification that the Chinese Government made. It’s a deeply disappointing decision particularly for Australian barley farmers,’ Mr Birmingham told Today on Tuesday morning.

‘This is a decision that reflects on the Chinese Government. We’ll look at the details of it carefully and closely. It is a deeply disappointing decision.

‘We’ll analyse all the details of it thoroughly and reserve all our rights in terms of how we appeal, how we respond.’ 

The tariff, to remain in place for five years, is set to cripple Australia’s drought-affected grain farmers.

Australia is the biggest barley supplier to China, exporting between $1.5 billion and $2 billion worth a year, which is more than half its exports. 

The move came just hours after Chinese president Xi Jinping told a virtual session of the World Health Assembly his country would support an independent probe into the origins of the outbreak – but only when the pandemic is over.

Australia’s Minister for Trade Mr Birmingham on Monday night denied Australia had subsidised or dumped barley in China.  

‘We reject the basis of this decision and will be assessing the details of the findings while we consider next steps,’ he said.

‘Australia is deeply disappointed with China’s decision to impose duties on Australian barley.

‘We reserve all rights to appeal this matter further and are confident that Australian farmers are among the most productive in the world, who operate without government subsidy of prices.’ 

China’s Ministry of Commerce released their own statement saying: ‘There was a subsidy for imported barley originating in Australia, the domestic barley industry was substantially damaged, and there was a causal relationship between the subsidy and the actual damage.’

The anti-dumping duties are set at 73.6 per cent on Australian exporters, including the Iluka Trust, Kalgan Nominees Pty. Ltd, JW&JI Mcdonald & Sons and Haycroft Enterprises.

An additional anti-subsidy duty of 6.9 per cent is also in place, with both effective from Tuesday for five years.  

But Australia could now look toward supplying the produce to Saudi Arabia, a government source said.

‘There aren’t many alternative markets. It could be sold to Saudi Arabia, but it will be heavily discounted to what Australian farmers could have received by selling to China,’ said the source, who didn’t want to be named.   

Mr Birmingham also confirmed Australia had expanded a trade agreement with Indonesia recently and had other potential buyers for produce. 

By contrast, China – the world’s top barley importer – will simply shift purchasing to other key producers, including France, Canada, Argentina and some smaller European exporters.

‘It’s very replaceable,’ said Andries De Groen, managing director at German headquartered barley trader Evergrain.

The tariffs come amid deteriorating relations between Canberra and Beijing, which have been exacerbated by the push for an investigation into the origins of COVID-19.

But the Chinese foreign ministry insisted the new policies are not related to the inquiry, and are instead a reflection of an 18-month anti-dumping investigation.

Chinese President Xi Jinping agreed to the coronavirus probe on Monday night, hours before the tariffs were imposed. 

He said he would only support the inquiry after the pandemic has been brought under control globally. 

China previously opposed calls for such investigations from both Washington and Canberra, but Mr Jinping said on Monday Beijing would support an impartial review.

‘China supports a comprehensive evaluation of the global response to the epidemic after the global epidemic is under control, to sum up experiences and remedy deficiencies,’ the leader said.

‘This work needs a scientific and professional attitude, and needs to be led by the WHO; and the principles of objectivity and fairness need to be upheld.’

Mr Jinping reiterated Beijing’s defence of its actions when the COVID-19 outbreak emerged in the country. 

It is widely accepted that the virus first spread from a wet food market in Wuhan, but there are questions about how quickly China responded and reported the outbreak.

Calling the pandemic ‘the most serious global public health emergency since the end of World War Two’, Mr Jinping said: ‘All along we have acted with openness and transparency and responsibility.

‘We have turned the tide on the virus,’ he said.

He also said China would stump up $3.1 billion over the next two years to help deal with COVID-19,  especially to help developing countries. 

The shock announcement came after the nation threatened to cripple Australia’s economy while Mr Morrison demanded the coronavirus probe.

China’s state-controlled media and trade experts warned Beijing’s boycott could extend beyond beef and barley, with iron ore – worth $63 billion a year to Australia’s economy – potentially next in line.

But 62 nations on Sunday pledged their support to the inquiry, including the entire 27-member European Union along with New Zealand, Indonesia, Japan, the UK, India, Canada, Russia, Mexico and Brazil.

There are currently 4.8 million known coronavirus cases worldwide, of which 317,215 are dead, 2.6 million sick and 1.8 million recovered.

The Global Times newspaper suggested China could easily turn to Brazil for iron ore and other commodities – and did not need Australian exports.

Earlier in the week China hinted at the tariff on Australian barley – and suspended imports of Australian beef from four major suppliers. 

Former Nationals leader Barnaby Joyce told the Seven Network last Monday ‘this is a case of payback.’ 

But Mr Morrison said China had not linked barley tariffs to a COVID-19 inquiry and said it would be ‘extremely disappointing’ if they were used as an act of retribution.

‘It’s an anti-dumping issue from their perspective. They certainly haven’t raised it as connected to other issues. I would be extremely disappointed if it was,’ he told reporters in Canberra. 

‘There’s no reason for me to think based on the way that they’re approaching it that I could draw that conclusion.’

Dumping is when a country exports a product unfairly cheaply to permeate a foreign market, with producers often subsidised by the government.

Australia contests the claims and is prepared to take China to the World Trade Organisation to fight against the tariffs.

‘That’s what the umpire is there for and that’s what we would test if we feel aggrieved that our position hasn’t been properly accepted or understood,’ Agriculture Minister David Littleproud previously said. 

One third of Australia’s exports – including iron ore, gas, coal and food – go to China, bringing in around $135 billion per year. 

The four meatworks which have been impacted account for more than a third of Australian beef exports.

China had up until this point ignored Australia’s attempts to discuss trade tensions over beef and barley imports.

Mr Birmingham confirmed his Chinese counterpart had not responded to requests for talks to end the diplomatic row.

‘We have not secured said meeting yet. I would hope that would be forthcoming,’ he told parliament last week.

A separate article in the Global Times discouraged Chinese citizens from doing business with Australia.

‘It now seems necessary to advise Chinese people and companies to watch out for potential risks when it comes to doing business with or studying in Australia,’ the opinion article said.

Last month the Chinese Embassy called Home Affairs Minister Peter Dutton ‘pitiful,’ ‘ignorant’ and a US ‘parrot’ after he told China to ‘answer questions’ about how coronavirus started. 

Source: WHO