“I am not downplaying the impact of China’s actions. They have hurt specific industries and regions, significantly in some cases. Nevertheless, the overall impact on our economy has, to date, been relatively modest,” Frydenberg said at the Australian National University. “This is perhaps surprising to many.”
While trade between China and Australia fell by about 5.4 billion Australian dollars ($4 billion) in the first half of 2021, compared to the previous year, Frydenberg said that loss had been mostly made up by a 4.4 billion Australian dollar ($3.27 billion) increase with the rest of the world.
Frydenberg also accused Beijing of trying to exert “political pressure” through its actions — some of Canberra’s strongest comments yet on the year-long dispute. He said Australia was “on the front line” of a new era of strategic competition between the United States and China, adding it was “no secret” that Beijing had tried to damage Australia’s economy over political grievances.
But Frydenberg on Monday said that other buyers have stepped in to fill the gap left by China in some important industries. In one example, the Australian treasurer said that while exports of coal to China had fallen by 33 million tons in the past year, exports to other international buyers had risen by about 30.8 million tons.
Frydenberg said that Australia also had lucrative relationships with the United States, Japan and South Korea. He said China was ranked sixth for foreign direct investment into Australia.
The treasurer said while he still hoped for a “constructive relationship” with China where both countries benefited, he warned Australian businesses that they needed to be aware that “the world has changed.”
“This creates greater uncertainty and risk. In this respect, they should always be looking to diversify their markets, and not overly rely on any one country. Essentially adopting a ‘China plus’ strategy,” he said.