- China’s Ministry of Commerce has launched a second inquiry into Australia’s wine exports in as many weeks.
- The latest will examine Australian subsidies that the Chinese government alleges enables winemakers to flood the market with cheap plonk.
- It marks the latest deterioration in relations between Australia and its largest trade partner.
- Visit Business Insider Australia’s homepage for more stories.
In an escalating war on Australian exports, the Chinese Ministery of Commerce is looking to drain local winemakers.
On Monday, the department revealed it had launched its second investigation into Australian wine exports in the space of as many weeks.
It will investigate 40 subsidies offered to Australian winemakers and conclude whether they permit cheap Australian wine to flood the market – the allegation raised by the Chinese Communist Party (CCP).
It’s a claim which has been strenuously denied by the Australian government and the wine industry.
Related to the first ‘dumping’ inquiry, both will run in tandem over the next 12 months, with an option to extend by six more.
Previous inquiries haven’t ended well for Australian exports. One concluded earlier this year with an 80% tariff on Australian barley, effectively kneecapping the $600-million-a-year export market.
If the CCP were to find the price of Australian wine has been artificially suppressed via subsidies or other means, it could well do the same to the $1.1 billion worth of Australian plonk that the Chinese buy a year.
The Ministry said it had informed the Australian government of the inquiry last week.
Tensions between the two have flared since April when the Australian government supported an inquiry into the origins and early management of the coronavirus.
The CCP fired back and warned students and tourists from travelling to Australia due to a rise in racism there.
While the Australian government has been reluctant to single it out, recent measures of its own design appear targeted at China.
Last week, the Morrison government indicted it would grant itself new powers to scupper deals made between foreign governments and Australian public entities. The move looks set to jeopardise the CCP’s Belt and Road Initiative (BRI) in Victoria and its Confuscious Institutes within Australian universities.
Meanwhile, a coordinated series of cyber attacks against Australia’s public and private sectors in June appear to be linked to China.
It’s led trade analysts to suggest the Australia-China trade relationship is past its peak.
This new inquiry at least will put some exporters in need of a drink.
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