Australia’s trade dispute with China cost it about US$3 billion in commodities sales last year, and that relatively small impact suggests there is little economic need for Canberra to bow to Beijing’s pressure.
That is the value of Australian exports lost last year compared with 2019, and covers commodities from copper and coal to wine and lobsters that are now subject to trade restrictions by Beijing, according to Chinese customs data.
The effect on some of those industries has been savage, as exporters are forced to abandon their biggest market and seek customers elsewhere.
At the same time, China’s state-aided splurge on infrastructure to rescue its economy from the COVID-19 pandemic has lifted the amount of iron ore it needs to fuel record-breaking steel production.
Australia is the dominant producer or iron ore and purchases by China rose almost US$10 billion last year.
The value forgone in commodity shipments to China does not capture replacement sales to new markets nor shifts in international prices and exchange rates. It is also dwarfed by Australia’s total exports of US$257 billion in the first 11 months of last year.
China’s total imports from the world fell 1.1 percent last year, as the pandemic roiled supply chains and depressed demand.
Beijing’s trade reprisals have stopped short of targeting the commodities most crucial to its own economy — iron ore and liquefied natural gas. They are also Australia’s biggest earners.
Australia is the developed economy most dependent on trade with China, and the two completed a free-trade agreement in 2015. Relations have deteriorated since 2018, when Canberra barred Huawei Technologies Co (華為) from its 5G network, and went into freefall last year after the government called for an independent probe into the origins of the virus.
China has made noises about breaking its reliance on foreign iron ore, but Australian miners are incredibly cost-effective and the government has few alternatives to avoid ratcheting up costs for its steel industry, the world’s largest.
Gas is viewed as a crucial bridging fuel to Beijing’s goal of carbon neutrality while it weans itself off coal. However, China does not produce enough domestically, and again, Australia is among the world’s top suppliers.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day