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In response to Beijing’s threats to impose crippling tariffs, Australian Prime Minister, Scott Morrison has blocked a Chinese takeover bid this week. He stepped into to block a £325million deal to stop dairy products from being sold to Chinese company, Mengniu Dairy. Australia has now put a block on any deal for some of the country’s oldest food brands as a trade war with Beijing continues.
China also announced an inquiry into Australia’s wine exports to the country.
Beijing will now evaluate the £660million-valued export link to the country, which could lead to tariffs.
China has also restricted beef exports and put a tariff on imports of barley in order to damage the Australian economy.
The tariff imposed on barley now stands at 80 percent, after China’s ambassador warned of crippling repercussions on Australia’s agricultural industry.
Australian winemakers have also declared any penalties imposed on the exports of wine could effectively close the market.
The country’s trade minister Simon Birmingham said of the probe: “This is a very disappointing and perplexing development.
“Australian wine is not sold at below-market prices and exports are not subsidised.”
The Chinese Ministry of Education has also advised students to reconsider studying in Australia, an industry which is valued at au$38billion (£20billion).
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In March, Mr Morrison had also tightened rules to stop foreign countries buying up Australian assets.
The tightening of restrictions comes as Australia also joined the international calls for an independent investigation to be launched in China over the origin of the coronavirus outbreak.
In addition, Australia has also removed technology firm Huawei from the country’s 5G network.
Despite Australia’s defiance against Beijing, the state has become incredibly dependent on China for trade.
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As per Government statistics in 2019, China accounts for 27.5 percent of all of Australia’s imports and exports.
In 2019, China was the state’s biggest trade partner and accounted for au$252billion (£137billion).
Such is the escalation of tensions and trade war between the two, former Prime Minister of Australia, Kevin Rudd had claimed conflict between the two is imminent.
Although Mr Morrison did not agree with the theory, the current Prime Minister admitted a conflict could no longer be ruled out.
He said earlier this month: “We’ve acknowledged that what was previously inconceivable and not considered even possible or likely in terms of those types of outcomes is not considered in those contexts anymore.
“Today, the Indo-Pacific is the epicentre of strategic competition.
“Tensions over territorial claims are growing.”
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