China's state media has described its latest move against Australian wine makers as a "destructive blow" that could see prices triple and shoppers ditch Aussie products in a new article overnight.

It comes after Trade Minister Simon Birmingham lashed out at China over its "false" claims surrounding the Australian wine industry in some of his harshest words against Beijing yet, saying he will continue to "call out" China's bad behaviour.

In an article in Chinese state mouthpiece The Global Times, an importer of Australian wine claimed he has "he has started to explore wine from other countries, including Chile, and he expects the demand for Australian wine to crater."

"Chinese customers chose Australian wines mostly because of the prices advantage compared with other countries' wines, and I expect the volume imported Australia will drop sharply," Long Guanyu, the general manager of a wine importer based in Xiamen, told the Global Times.

It comes as the world's eyes focus on China's tough action on Australia, with the BBC describing some of Birmingham's comments his "strongest yet" against Xi Jinping.

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Mr Birmingham warned this week the world is watching as China bans more Aussie products.

"Australia is not the only country that has seen these types of punitive measures and I expect the rest of the world will be watching quite closely what is happening in Australia," he said.

Overnight the European Council on Foreign Relations said China's recent actions against Australia "show how far it is already willing to go on economic coercion".

Yesterday, China - which is Australia's number one trading partner - slapped Australian wine makers with even more tariffs than the original 107-212 per cent rise it hit producers with last month.

China's Commerce Ministry said it would impose temporary anti-subsidy tariffs on imported Australian wines of an added 6.3 per cent to 6.4 per cent, concluding "Australian subsidies have caused substantial damage to China's domestic wine industry".

The Global Times piece claims the move is "not linked to the deteriorating bilateral ties" but Australia has been singled out with a series of complicated and bitter trade disputes erupting in recent months.

 

 

In August, China launched an "anti-dumping investigation" into Australian wine exports, which accused Australia of flooding China with cheap wine at cost or below cost prices in an effort to skew the market in Australia's favour.

Australia vehemently rejects the claims, with Mr Birmingham telling the ABC's Patricia Karvelas that Beijing doesn't have the evidence to support the claims and that "we appreciate there's a bigger picture and issue here".

"The idea that Australian winemakers dump their product in China, as was originally claimed by China, or that they are subsidised by government to some extent to export to China, is just false," he said.

"The evidence is very clear in the Australian wine industry's favour, and we will continue to defend the wine industry by using the domestic processes available in China and, ultimately, considering the appeal rights of the independent umpire through the World Trade Organisation."

 

 

Almost 40 per cent of Australian wine is exported to China in a $1.25 billion industry. Australia ships more bottles to the country than other wine producing regions such as France, Italy and the US.

"These tariffs are a likely blow to Australian wine makers exporting to China, locking out price sensitive consumers," The Global Times piece states.

A flabbergasted Mr Birmingham described China's recent actions as "obviously another step in what has been a disappointing, a frustrating and a deeply concerning pattern of decisions by China over quite some period of time".

"We have called out those behaviours and that pattern of behaviour. We've done so publicly. We've done so directly with China. We are continuing to do so through the WTO, and we will keep standing up for Australian industry.

"Any idea that our wine is dumped in the Chinese market doesn't stand up to scrutiny. Australian wine is the second highest price point in the Chinese market.

"And for Australia, it's basically our highest-priced market, and so our producers are sending their premium product at premium prices into that market, and they're doing so free of any government subsidy.

"Winemakers are more likely to complain about how much tax they pay than how much subsidy they get."

Senator Simon Birmingham in Parliament House, Canberra. Picture: Gary Ramage
Senator Simon Birmingham in Parliament House, Canberra. Picture: Gary Ramage

 

 

Industry group Australian Grape and Wine have previously said they were "deeply disappointed" by China but the latest round of tariffs are likely to have little impact.

"It's unlikely they'll have any practical implication given the current tariffs are so high," CEO Tony Battaglene told the ABC.

China's investigation is expected to be completed by August 18, 2021, under normal circumstances, but could be prolonged until February 18, 2022, due to the coronavirus pandemic, a Chinese ministry statement said.

Mr Birmingham agreed there were "clearly impacts" on Australian wine producers and that "we recognise that some are now under stress and pressure as a result of the decisions China has taken".

Already this year China has slapped tariffs on Australian barley and suspended some beef exports in what is a significant blow since almost 30 per cent of Australia's total agricultural exports go to China.

Lamb joins a long list of Australian products sanctioned by China that also includes timber. A sixth Australian beef exporter was hit with a ban on Monday.

Australian wheat and cotton farmers have been put on notice they are next in China's firing line in a move that could further strain tensions between the two countries.

"Our wine industry knows there's something to see here. Our live seafood industry knows that there is. Our timber industry knows that there is. Our fresh meat industry knows that there is. Our barley and grain sector knows that there is," Mr Birmingham said.

"The sectors that have seen the obvious, continuous accumulation of impacts throughout the course of this year, and, indeed, in the case of the barley processors that started a couple of years ago, clearly can see a pattern of behaviour, and that pattern of behaviour is inconsistent with both the intent and the spirit of the commitments China has made more broadly to the World Trade Organisation."

Originally published as China replies: 'Destructive blow to Aus'


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