Concerns about rising political tensions threaten Australian exports as Chinese traders weigh up the costs of potential supply disruptions.

Traders and analysts in China said while there was no directive from the Chinese authorities to cancel Australian orders, that might happen anyway because buyers were worried about supply disruptions or a backlash from consumers if the political spat escalated.
“Although I don’t want to reduce my orders, we have to make preparations if the bilateral relationship keeps deteriorating, ” said one beef trader who sells Australian meat in China, who declined to be named.
He said he was worried the hostile posturing on both sides could cause Chinese consumers to doubt the quality of Australian meat.
“Im worried Chinese social media will blow this issue up. Although I don’t want to reduce my orders, we have to make preparations if the bilateral relationship keeps deteriorating. In the second half I might have to import more beef from Russia, New Zealand and the United States,” the trader said.
Last month, Chinese ambassador to Australia Cheng Jingye told The Australian Financial Review there could be a consumer boycott of Australian products due to political tensions over coronavirus. But there is no sign that is happening in China so far. Social media has been relatively quiet on Australia this week and there has been little coverage of the dispute in the Chinese media, apart from the hawkish Global Times.
However, traders who spoke to the Financial Review said it was unclear if that would change. Some said they hoped it was a temporary blip that wouldn’t affect demand for Australian produce, which remained strong. But they also warned should tensions escalate to a point where there was a backlash from Chinese consumers, they would start cancelling orders.
They said they also had to assess the risk of Australian shipments being held up at customs by onerous inspection requirements and red tape because local officials believed the country was out of favour with Beijing.
The Australian dairy industry raised concerns about the political tensions with the government this week. Exporters such as a2 Milk Company have said distribution channels were opening up again in China and demand for Australian products remained high as consumers focused more on health.
China has become an increasingly important market for Australian dairy in recent years and now accounts for about one third of all exports. About 12 per cent of all Australian milk ends up in China.