Australia pushes Chinese firms away
▶ Analysts say nation could hit back hard against provocations
Another downward spiral in China- Australia relationship serves as a fresh warning to the Chinese corporate sector that their businesses will not be hijacked by the deterioration of the tensions, industry insiders told the Global Times on Thursday.
Souring bilateral ties are already prompting Chinese businesses to think twice in their dealings with Australia, even in some of the most profitable areas, given the prospect of foreseeable trade decoupling between the two.
Australia unilaterally escalated bilateral tensions on Wednesday when its federal government tore up an agreement between the state of Victoria and China on the Belt and Road Initiative ( BRI), becoming the first country to withdraw from the China- proposed, open initiative that has received increasing international participation.
An anonymous insider of a Guangdong- based natural gas group company, with the annual gas transport capacity up to billions of cubic meters, told the Global Times on Thursday that the company was in preliminary talks with potential suppliers from Australia, Qatar and Russia. However, with the continuous escalation of trade tensions between China and Australia, the company is considering a diversion of its business from Australia to other countries.
A manager working at a gas- fired power plant told the Global Times on condition of anonymity that the government has an influential sway over energy supply, which is a matter of great significance.
Although there has no a big withdrawal for the energy sector, Chinese experts said that the Australian action, and the continuous fueling of antiChina sentiment by politicians in Canberra, could send bilateral trade and investment ties into a further downward spiral, further exposing the country’s weakness as the economy is most dependent on China’s.
“For Chinese companies, diversifying their import sources will definitely be a trend. It is crucial to emphasize the diversity of sources in this growing trade complex, not only for companies, but also at the national level,” Dong Xiucheng, a professor at the University of International Business and Economics said on Thursday.
Dong said in recent years, Australia has been headstrong in acting as a deputy sheriff for the US, and it has deliberately created troubles. Such action has put energy cooperation between China and Australia in serious peril.
Even for iron ore, the most valuable export so far unaffected by tensions, the tremor before an earthquake can be felt. Chinese companies are diversifying their exploitation of iron ore in Africa, such as in Algeria at a record pace amid soaring prices.