China trade problems reinforce importance of Adani: Canavan
AS STORM clouds hang over Australia's trade relationship with China, there's fears that CQ's coal as well as beef could end up in the firing line if relations further soured.
CQ-based Senator Matt Canavan said it reinforced the importance of forging successful trade relationships with other nations such as India through Adani's Carmichael Mine and Rail Project.
While it wasn't articulated as the reason why recent trade restrictions were being imposed on Australia's barley and beef exports, it is suspected that China was using trade restrictions to penalise Australia for demanding an independent inquiry into the coronavirus.
Australia has now secured strong global backing for an inquiry into COVID-19 pandemic, with more than 100 nations (a majority) co-sponsoring a motion calling for the review at the World Health Assembly on Tuesday.
Senator Canavan said it wasn't unprecedented for China to "change tack" and target Australia through trade, underscoring the need for us to get serious about diversifying our markets to protect ourselves from these types of changes over the medium and long term.
"There's an opaqueness about decision making but we can only express our disappointment and get on with helping the beef sector grow and develop, including new and interesting markets," Senator Canavan said.
Given that Australia's biggest export market for coal was China, we are particularly vulnerable if China was to broaden their trade restrictions.
China accounts for almost one-third of Australia's total exports, contributing six per cent to Australia's GDP - of which coal makes up almost four per cent.
Senator Canavan noted that China had taken action in the past to restrict access for our coal shipments where it was very difficult to know exactly why the decision's being made - possibly linked to "unhappiness in the relationship".
"That's a risk factor for us. We've got to be live to these risks in my view," he said.
"This is now becoming a pattern of behaviour of China to turn the tap on and off. Whether that's to protect their own domestic industry or because they're upset about our foreign policy relationship.
"That extra volatility means that there's a high risk there and we should be doing everything we can to diversify our trade and reduce that risk for producers and coal miners and business in Central Queensland."
This was a reason why Senator Canavan was so desperate to get Adani's Carmichael Mine Project underway.
"I was passionate about Adani because it was a local issue and it provided local jobs but the broader context was we as a nation had a massive strategic interest in developing better relations with India," he said.
"I think our economic relationship has been too reliant on China.. In any business, you don't want to put all your eggs in one basket."
He said Adani was our best chance to start a better relationship with India.
"It was the biggest investment in Australia by an Indian company by far. It was something the Indian business community and government were looking at and watching," he said.
"Thank god we have got that away and we have something to build upon India, in my view, beyond just coal, into other industries as well so that we can diversify our markets and we can become a more resilient country because of that."