Australia says industry reports on China trade 'deeply troubling'

© Reuters. Australian flag waves in front of the Great Hall of the People in Beijing

By Kirsty Needham and Dominique Patton

SYDNEY/BEIJING (Reuters) - Australia says it is closely monitoring trade flows to China amid "deeply troubling" reports from industry that Chinese buyers have been told not to purchase seven categories of Australian products and commodities from Friday.

Australian media have reported that Chinese importers had been informally warned by Chinese customs officials that Australian wine, copper ore, barley, coal, sugar, timber and lobster will be targeted for increased inspections from Nov. 6.

Australia's trade minister Simon Birmingham said Chinese officials had publicly and privately denied any coordinated effort was being taken against Australia, and he hoped Beijing "is true to its word".

"They deny any discriminatory actions that are being taken. But that doesn't seem to be what industry is seeing and hearing at present," he said on radio station 5AA.

A Beijing-based wine importer and distributor told Reuters his customs agent in Shanghai was called to a meeting last week and warned that Australian wine would no longer be processed by customs after Nov.6.

A member of staff at his company was also called to a meeting in Beijing on Monday and given the same verbal instruction, that from Nov. 6 onwards "Australian wine will not be able to be processed until other issues were addressed," he said.

The other issues weren't specified, he added, declining to be identified because of the sensitivity of the matter.

Diplomatic relations between Australia and its largest trading partner have become strained after Beijing was angered by Australia's call for an international inquiry into the source of the coronavirus, and Australian police raids connected to foreign interference investigations.

On Thursday, a Chinese foreign ministry spokesman told a media briefing in Beijing that Chinese measures on foreign imports were in line with Chinese law and international customs practices.

DELAY WARNINGS

Australian companies stopped sending rock lobster to China this week after new customs inspections were imposed on the live seafood, resulting in lobsters dying before they could reach customers. China also halted some imports of timber and banned barley shipments from an Australian-based grain exporter.

"Clearly its unacceptable for precious fragile cargo like live seafood to sit on a port for days on end waiting to clear," Birmingham told reporters.

China had earlier launched an anti-dumping investigation into Australian wine, and imposed dumping tariffs on Australian barley. Shares in Australia's Treasury Wine (AX:TWE) rebounded on Friday after steep falls in recent days, but were still down about 4% for the week.

Birmingham said the "range and extent of concerns that industry are hearing is deeply troubling".

"The constant stream, it seems, of concerning, troubling administrative or other decisions being taken in China, heightens the risk for Australian businesses."

Australia's agriculture department held a meeting on Thursday for 400 farmers and exporters to China, warning of the recent delays and commercial losses, the department said in a statement to Reuters. Department officials told exporters to seek advice from importers in China on potential disruptions to clearing shipments.

An editorial in the state-run China Daily newspaper on Friday said China's investigations covered only a small portion of imports from Australia, adding Canberra should "steer clear of Washington's brinkmanship with China before it is too late".

"Choosing sides will be a decision Australia will come to regret as its economy will only suffer further pain," it said, referring to Australia's U.S. alliance.

Australia joined the United States, India and Japan for the three-way Malabar naval exercise on Thursday, the first time Australia has participated since 2007.

The China Daily editorial said Australia was "aggressively sending warships to China's doorsteps".