China’s trade threats hit Australia with ‘psychological warfare’

China’s trade threats hit Australia with ‘psychological warfare’

Australian exporters to China are angry with the Morrison government’s handling of the trade relationship between the two economies, accusing the government of abandoning them as Beijing’s trade tactics and propaganda show the first signs of significant political impact.

Local wine exporters say they are being told they can not ship to China and barley is being rejected by Chinese importers. Australian timber, copper, and coal are also facing restrictions and tonnes of live lobster has died on the tarmac at a Shanghai airport.

The fallout from verbal directives by Chinese customs agents to stop importing seven Australian products from Friday has rattled markets and forced other exporters to keep their stock in Australia to avoid being rejected by Chinese authorities.

The Commonwealth Bank estimates the verbal instructions, which have been repeated by Chinese state media but not the Chinese government, now threaten to cover more than $27 billion of Australia’s exports to China if they were applied across entire industries.

The Chinese government has also urged students and tourists to travel elsewhere, leaving Australia facing a $45 billion hit – 10 per cent of Australia’s annual exports – as the economy attempts to recover from the coronavirus without the support of its largest trading partner.