Clouds. 36   F New York
AI-Powered News Summarizer
Top Stories

Australia is out of recession. Now it needs to avoid a trade war with China

December 2, 2020. Summarized by summa-bot.

Australia's economy is growing again after the coronavirus pandemic pushed it into its first recession in three decades.

"China is our number one trading partner.

Many Australian jobs rely on trade," he said, adding that Australia is looking for free trade agreements with other partners around the world — including the European Union — in an effort to reduce the risk.

Economists, meanwhile, say the ongoing trade spat hasn't yet escalated to the point at which it poses a real threat to Australia's economy.

China has slapped Australian winemakers with heavy tariffs, and banned or taxed exports of other products, including beef and barley.

An all-out trade war with China would be devastating for Australia.

The world's second biggest economy is Australia's largest trading partner, with trade between the two valued at 215 billion Australian dollars ($158 billion) in 2018, according to official statistics.

Should nearly all trade between the two be shut down, that would cost Australia some 6% of GDP, according to researchers at the University of Western Australia and Australian National University.

"Any deterioration in the trading relationship is disconcerting," economists at Oxford Economics wrote in a report last month.

The trade dispute has already upended some industries: Australia's winemakers have denounced recent tariffs as incredibly damaging and they've been forced to look for new buyers in America and Europe.

Ben Udy, Australia and New Zealand economist at Capital Economics, pointed out in a recent research note that the country's historic drought likely also played a role in harming those industries.

"At the moment, Chinese trade bans are targeting pain points that hurt relatively small export sectors, such as wine, beef and other areas," said Hans Hendrischke, a professor of Chinese business and management at the University of Sydney.

The Oxford Economics economists noted that 68% of Australia's raw materials exports went to China last year.

Sean Langcake, one of the authors of that report, told CNN Business that such restrictions are unlikely, given how reliant China's steel industry is on them.

While China has not formally announced restrictions on Australia's mining industry, there have been some signs of tension.

While not as significant as iron ore, coal is still a major export to China from Australia.

Summarizer is on Google News. Now you can get the latest AI summarized news on your favorite news platform.

Don't like Google News? We have an RSS Feed for you.

Suggestions