Three years ago, China imposed high penalties on the import of Australian dairy and agricultural products as an angry response to Australia’s call for an investigation into the origin of the coronavirus, which was suspected to have come from China. As a result, that trade had virtually come to a halt.
In April, China and Australia agreed to resolve their dispute over the import of barley, with Canberra suspending a complaint at the World Trade Organization (WTO) regarding Beijing's anti-dumping duties. The tariffs will be lowered again starting Saturday, said the Chinese Ministry of Commerce.
For Australian agriculture, a thaw in the chilled trade relations would be a welcome development. China was previously an important market for Australian grain, especially barley. For the relations between China and Australia, improvement in trade could be a harbinger of further rapprochement and dialogue.
Since last year, a new Labor government has been in power in Australia. Earlier this year, China had already started importing Australian coal and other raw materials again.
Political tensions between the two countries have increased significantly over the past years due to various issues. Prime Minister Anthony Albanese's visit to Beijing later this year could be an opportunity to address several bilateral matters.
The Chinese are displeased that Australia has joined the U.S. Navy fleet in Asian waters aiming to contain the expansion of the Chinese sphere of influence towards Taiwan and the Philippines.
Moreover, the broader context of the trade war between China and the United States continues to impact China's trade policy, which can influence the dynamics of relations between China and other trading partners, including Australia. The European Union has also found itself involved in this arena of the U.S.-China trade confrontation.
China's decision to lift the increased import tariffs on Australian grain is seen as a step in the right direction for trade relations between the two countries. The relaxation could stimulate the Australian agricultural sector and provide opportunities for further economic cooperation between China and Australia.