Foreign Minister Penny Wong’s visiting Beijing on Wednesday, the sheer fact she’s the first Australian Minister in over 3 years to visit is a huge step in the right direction of undoing some of the trade damage caused by Scott Morrison & Co. Politics aside, however you dissect the former Prime Ministers comments/stance towards China it always looked likely to end in tears which indeed it did e.g. in April 2020 Scott Morrison called for an inquiry into the origins of Covid, we all may have thought it but where was the upside in making the issue a political football. Business leaders are hoping for some positive news on the current trade bans which have weighed heavily on a number of listed Australian companies over recent years.
- MM believes the Foreign Ministers’ 24-hour meeting in China is a huge step forward for Australian trade but there’s plenty of work to be done to return us to the previous levels of economic openness with China.
The political compromise required by Ms Wong to deliver a good result will be substantial but with trade tariffs of previously more than $20bn worth of exports that’s indeed what we anticipate will unfold i.e. from China’s support of Russia to its stance on human rights, there are currently plenty of areas where discretion will be needed.
- MM believes China will start to ease trade bans with Australia in 2023 but it may take some time for all industries to feel the benefits.
The wild card is China’s Covid problem but as harsh as the reality may become the last few years have shown us that their economy is likely to emerge stronger in 6-12 months’ time, especially if/when Beijing decides its time to stimulate i.e. usually a tidal wave of money that ultimately achieves its goal.
