{"id":21760,"date":"2020-08-20T20:26:56","date_gmt":"2020-08-20T20:26:56","guid":{"rendered":"https:\/\/www.lifeandnews.com\/articles\/?p=21760"},"modified":"2020-08-22T02:01:22","modified_gmt":"2020-08-22T02:01:22","slug":"its-hard-to-tell-why-china-is-targeting-australian-wine-there-are-two-possibilities","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/its-hard-to-tell-why-china-is-targeting-australian-wine-there-are-two-possibilities\/","title":{"rendered":"It’s hard to tell why China is targeting Australian wine. There are two possibilities"},"content":{"rendered":"

Markus Wagner<\/a>, University of Wollongong<\/a><\/em> and Weihuan Zhou<\/a>, UNSW<\/a><\/em><\/p>\n

It\u2019s on again. This time it\u2019s Australia\u2019s wine industry that\u2019s under investigation<\/a> in China for allegedly violating anti-dumping rules.<\/p>\n

The investigation has sent shock waves through the wine industry and beyond.<\/p>\n

Broadly speaking, anti-dumping rules prohibit producers from selling anything for less than its market value.<\/p>\n

The Chinese industry body claims<\/a> that the market share of Chinese wine has fallen from about 75% to just under 50% over the past four years.<\/p>\n

It says this is due to the sale of Australian wine being dumped (sold at less than market prices) in China. It has asked for the imposition of an anti-dumping tariff of 202.70%, which would triple the price at which Australian wine is sold.<\/p>\n

\"\"<\/a>
The official complaint.<\/span>
\nMinistry of Commerce<\/a><\/span><\/figcaption><\/figure>\n

Australian wine has enjoyed zero tariffs since 2019 under the China-Australia Free Trade Agreement<\/a>.<\/p>\n

In the past financial year, nearly 40%<\/a> of Australian wine exports (worth AU$1.1 billion) went to China.<\/p>\n

The proposed duty would effectively exclude Australian wine from the Chinese market.<\/p>\n

This comes after a highly publicised interview<\/a> in April in which China\u2019s Ambassador to Australia Jingye Cheng said the Chinese public was \u201cfrustrated, dismayed and disappointed\u201d at Australia\u2019s stance on a number of issues and might boycott Australian goods and services.<\/p>\n

Among those issues was Australia\u2019s call for an investigation<\/a> into China\u2019s handling of the coronavirus outbreak.<\/p>\n

Other irritants include Australia\u2019s criticism<\/a> of the new Hong Kong security law and its decision to ban<\/a> China\u2019s Huawei from involvement in Australia\u2019s 5G network.<\/p>\n

\n


\n
\nRead more:
\nChina used anti-dumping rules against us because what goes around comes around<\/a>
\n<\/strong>
\n<\/em><\/p>\n

\n

Anti-dumping investigations turn on highly technical data, often obtainable only through the analysis of confidential business information.<\/p>\n

This latest probe can be looked at in two ways:<\/p>\n

1. Tit for tat<\/h2>\n

One is that it is just a tit for tat action following Australian anti-dumping measures<\/a> against Chinese electric cables, wind towers, glass, A4 copy paper, chemicals, herbicides and aluminium products and steel.<\/p>\n

Australia has more anti-dumping measures in place against China<\/a> than it does against any other country.<\/p>\n

\n

Australian anti-dumping and countervailing measures by country, March 2020<\/strong><\/p>\n

\"\"<\/a>
\nAnti-Dumping Commission, March 31, 2020<\/a><\/span><\/figcaption><\/figure>\n
\n

China\u2019s foreign ministry was quick to suggest its actions were a \u201cnormal anti-dumping investigation<\/a>\u201d.<\/p>\n

The ministry could find Australia\u2019s wine industry is in a particular market situation<\/a>, a technical term relating to government intervention and subsidies that Australia uses<\/a> when it imposes anti-dumping duties.<\/p>\n

Standing in the way of such action is the presence of Chinese investors<\/a> in Australian wineries that sell directly to China via their own distribution networks. It would be difficult to design an anti-dumping penalty that didn\u2019t also hit them.<\/p>\n

2. Geo Economics<\/h2>\n

Another possibility is that China is trying to inflict economic pain to send a political message.<\/p>\n

Using wine would be a shrewd move. China doesn\u2019t need it for its economic growth. It has the added benefit of upsetting Australia\u2019s powerful agricultural lobby which has the ear of governments.<\/p>\n

The latest probe follows sanctions against Australian coal<\/a>, barley<\/a> and beef<\/a>.<\/p>\n

\n


\n
\nRead more:
\nVital Signs: Australian barley growers are the victims of weaponised trade rules<\/a>
\n<\/strong>
\n<\/em><\/p>\n

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The aim might be for the targeted industries, and their workers, to pressure the Australian government to be less confrontational with China.<\/p>\n

A related strategy might be to portray Australia in a negative light. China (questionably) claimed that it stopped Australian coal and beef shipments for quality<\/a> and hygiene<\/a> reasons. Along with travel warnings<\/a>, it is a way of turning the sentiment of Chinese citizens against Australia.<\/p>\n

It\u2019s hard to know which way to jump<\/h2>\n

It\u2019s too early to tell whether China is simply expressing its dissatisfaction with Australian anti-dumping actions against it, or whether it is hoping to make Australia more politically malleable.<\/p>\n

Each would require a different response.<\/p>\n

The anti-dumping investigation might take up to 18 months<\/a>, as did the investigation into Australian barley which resulted in extra tariffs.<\/p>\n

Both countries stand to lose from a protracted battle.<\/p>\n

\n


\n
\nRead more:
\nChina might well refuse to take our barley, and there would be little we could do<\/a>
\n<\/strong>
\n<\/em><\/p>\n

\n

But China can get its coal, barley, beef and wine from elsewhere, although at potentially higher cost or lower quality. It is also trying to diversify its sources of iron ore<\/a>.<\/p>\n

The uncomfortable truth is that Australia\u2019s economy relies on China far more<\/a> than China\u2019s relies on Australia.\"The<\/p>\n

Markus Wagner<\/a>, Associate Professor of Law, University of Wollongong<\/a><\/em> and Weihuan Zhou<\/a>, Senior Lecturer and member of Herbert Smith Freehills CIBEL Centre, Faculty of Law, UNSW Sydney, UNSW<\/a><\/em><\/p>\n

This article is republished from The Conversation<\/a> under a Creative Commons license. Read the original article<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Markus Wagner, University of Wollongong and Weihuan Zhou, UNSW It\u2019s on again. This time it\u2019s Australia\u2019s wine industry that\u2019s under investigation in China for allegedly violating anti-dumping rules. The investigation has sent shock waves through the wine industry and beyond. Broadly speaking, anti-dumping rules prohibit producers from selling anything for less than its market value. […]<\/p>\n","protected":false},"author":44,"featured_media":21761,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5,277],"tags":[8526,145,1558,951,2772],"_links":{"self":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/21760"}],"collection":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/comments?post=21760"}],"version-history":[{"count":2,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/21760\/revisions"}],"predecessor-version":[{"id":21771,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/21760\/revisions\/21771"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media\/21761"}],"wp:attachment":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media?parent=21760"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/categories?post=21760"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/tags?post=21760"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}