SYDNEY – Australia’s government has warned businesses against relying solely on China for their economic success after Beijing decided to scrap heavy tariffs on Australian wine exports this week. 

Assistant Minister for Trade Tim Ayres said trade diversification was “absolutely critical” for Australian businesses, and the government would be working with wine producers to “diversify their trade markets”.

“It’s never good to put all of your eggs in one basket, in business terms,” he said at a press conference in Canberra on March 29.

The lifting of China’s tariffs on Australian wine, some of them as high as 218 per cent, would allow the return of a trade which at its height was worth A$1.2 billion (S$1.05 billion), Mr Ayres said.

The trade sanctions were one of a number of measures imposed on Australian exports at the height of tensions between Canberra and Beijing in 2020, following a call by Australia’s then Prime Minister Scott Morrison for an independent investigation into the origins of Covid-19.

China’s Ministry of Commerce announced on March 28 that it would lift punitive tariffs on Australian exports from March 29, saying they were no longer necessary “in view of the changes in the relevant wine market conditions”.

Following the election of Australia’s centre-left Labor government in May 2022, relations between the two countries have improved. Meetings between high-level officials have restarted and Beijing has lifted trade sanctions on barley, wine, coal and timber. China is Australia’s largest trading partner by a significant margin.

Despite the improving ties, Australian authorities of both political persuasions have been pushing businesses to diversify their trading partners in the wake of the China trade sanctions. BLOOMBERG