Trade diversification in doubt as Canberra obsesses over politics – Global Times

Early Monday morning in Asia, China’s Global Times criticized the Aussie trade minister Simon Birmingham’s warning over China’s "unpredictable regulatory interventions". The state-backed news agency also cited fears of no more bilateral trades with the nation.

Key quotes

Politicians from the Morrison government appear more willing to encourage Australian companies to explore new markets rather than make any effort to ease the simmering tensions with China, disregarding the fact that global demand is shrinking rapidly amid the COVID-19 pandemic.

Australia's trade minister Simon Birmingham warned on Sunday that Australian businesses could be encouraged to pursue a diversification strategy as China's ‘unpredictable regulatory interventions’ have created additional risks for trade.

‘I would, of course, encourage business, where they can see the equal reward or similar reward, by spreading their risk across numerous markets, to do so. And that would be wise business practice,’ Birmingham said.

 The Australian government seems more interested in exploiting China's suspension of some beef imports and its potential imposition of tariffs on Australian barley to describe itself as a victim of trade sanctions.

From China's perspective, Australia has never been a friendly trading partner, and consultations with the country on trade issues have always been frustrating, which has apparently weakened its motivation to promote bilateral trade.

FX implication

Amid the presently risk-averse markets, news like this adds burden to the AUD/USD pair that’s currently inching close to 0.6400 while weighed down recently by the US-China tussle.