Exporters in Australia are increasingly looking to new markets for their goods as they try to avoid exposure to tariffs implemented by China, a report has found.
An analysis by Lowy Institute chief economist Roland Rajah found sales of products including barley, copper, cotton, seafood and timber to other markets have risen significantly since new sanctions were introduced by Beijing in late 2020. The suddenness of the shift indicates this is mainly down to trade diversification, the Australian Associated Press reports.
Mr Rajah suggested Australian exporters have been able to benefit because the Chinese sanctions have been targeted at goods for which it has alternative suppliers. This in turn means there are also more buyers for Australian goods, as other sellers have increased their sales to China.
"This shuffling of global trade is precisely the reason the damage inflicted on Australia has been limited," he stated.
However, there remain some areas where fewer alternative options are available. Wine exporters, for example, have struggled to make up for the loss of the premium Chinese market, while beef exports are also down - though the report noted this is "more a reflection of supply-side issues after years of drought".
In 2019, prior to new tariffs being introduced, exports to China amounted to AU$25 billion, or around 1.3 per cent of gross GDP. However, as of the end of January 2021, this has dropped to just AU$5 billion a year.
The research comes shortly after the release of a new Australian government report that aims to set out how the country can look for new markets in the Asia-Pacific region to make up for losses caused by the coronavirus pandemic and the trade war with China.
Trade minister Dan Tehan said this "advocates a 'Team Australia' approach and identifies practical, specific actions that business and governments can take to strengthen the presence of Australia, and our businesses, in Asia".
Among its recommendations, the Asia Taskforce report proposes focusing on markets and sectors where Australia has competitive advantages, such as healthcare in Indonesia and financial services in Japan, India, Vietnam and Korea.