Australian winemakers are preparing for the anticipated lifting of tariffs in China, their principal market, by bolstering shipments to the Hong Kong Special Administrative Region (HKSAR). This move, informed by industry insiders and media revelations, underscores their optimism fueled by strengthening trade relations between China and Australia, alongside signs of recovery in Chinese consumer demand.
Recent narratives reveal that Australian wine producers have transported millions of bottles to HKSAR, betting on China’s imminent cessation of tariffs on Australian wine, which promises to rejuvenate a trade avenue valued in the hundreds of millions. This speculation finds its basis in the Chinese Ministry of Commerce (MOFCOM)’s ongoing review of anti-dumping and countervailing duties on Australian wines, initiated in November 2023 with an expected conclusion by November 2024.
Treasury Wine Estates (TWE), a global Australian wine powerhouse, declared its preparedness to reinvigorate its presence in China, pending a favorable review outcome. The firm clarified that its wine shipments to a Hong Kong warehouse are not in anticipation of imminent changes to China’s tariff policies on Australian wine.
Despite the absence of immediate updates on the review’s progression, insights from a senior figure within a Chinese wine industry group highlight the active nature of the review, with the conclusion timeframe resting solely with China. Australian stakeholders are counseled to exercise patience as China’s relevant department actively addresses the situation.
Despite the imposition of tariffs and resultant market share loss to French and Chilean wines from a 2019 peak, Australian winemakers’ current endeavors signal an unwavering belief in the Chinese market’s potential, despite global challenges of weak consumption and oversupply.
Bilateral trade between China and Australia flourished in 2023, marking a 9.8 percent year-on-year increase and surpassing pre-pandemic levels. This growth is exemplified by the resurgence of Australian coal imports by China, which escalated to over 50 million tons in 2023.
Experts, including Chen Hong from East China Normal University, perceive a strong impetus among Australian winemakers, distributors, and governmental bodies to amend tariffs and reclaim the expansive Chinese market. This urgency contrasts with attempts to identify alternative markets, which have fallen short of the Chinese market’s potential.
With the Labor government nearing the midpoint of its term and facing an upcoming federal election, there exists a critical demand for resolving ongoing trade disputes, such as those affecting barley and wine. The improvement of bilateral economic and trade relations, especially amidst China’s economic resurgence and consumption rebound, remains a focal point of optimism
Experts emphasize that, despite existing technical hurdles, none present insurmountable barriers if both nations engage sincerely to address these challenges, moving away from the politicized tactics of past administrations.
BUSINESS GENERAL | Australian PM’s Forthcoming China Visit Turning a New Leaf in Bilateral Bonds
