Australian government push to tap China market heats up industry debate about over-dependence

Submissions to Australian parliamentary inquiry highlight how government’s China focus has hurt export opportunities to other markets

Inquiry comes amid recent surge in debate about over-reliance, triggered by interruption of global supply chains due to Covid-19 shutdowns

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Australia’s export-oriented agricultural industries are reliant on Chinese demand. Photo: Shutterstock

Published: 2:00pm, 7 May 2020Updated: 10:22am, 21 May 2020

Australia’s economy has become too reliant on China as a result of a government push for domestic industry to maximise exports to the world’s second largest economy, industry submissions to a government inquiry say.

Business groups also singled out Australian government policies, including management of bilateral relationships with Indonesia and India, as hurting access to alternative markets.

While some Australian export industries are not reliant on demand from China, companies like those in the mining sector are putting all of their eggs in one basket, the Small Business Association of Australia said in its submission.

“Minerals exporting has been dominant for several decades. The top four items [iron ore, coal briquettes, gold, copper ore] here represent 82.7 per cent of our export dollars. This is out of proportion if we were to lose the trade,” the association said.

It also called on the government to use the Covid-19 pandemic and devastating bush fires early this year as opportunities to look at the long-term revival of Australian manufacturing, thereby easing the country’s reliance on foreign producers and owners.

The long-running national debate has taken on new urgency since global supply chains were interrupted by the pandemic, sparking the current inquiry by parliament’s Joint Standing Committee on Trade and Investment Growth, which is looking at economic risks associated with dependence on one market.

The committee is chaired by the outspoken conservative politician George Christensen, who in a media interview in March said Australia should take back land owned by Chinese firms as compensation for the economic damage caused by the coronavirus outbreak.