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China's Beef With Australia Is Heating Up, Here's What Could Happen If It Boils Over

It would be pretty safe to suggest a lot of things aren't going to be the same again for some time.

So could we add our sometimes turbulent relationship with China to that list?

A diplomatic stoush has broken out between Australia and the Asian nation after China blindsided Aussies by suspending beef imports from four major abattoirs, which further escalated trade and diplomatic tensions.

Some 18 percent of our nation's beef production, worth more than $3 billion annually, is exported to China.

The four meatworks involved -- JBS Dinmore, JBS Beef City, Kilcoy, and Northern Cooperative Meat Company -- account for about 35 percent of Australia's beef exports alone.

It is a troubling predicament, and one Professor Joseph Camilleri at LaTrobe University believes "could escalate".

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Speaking to 10 daily Camilleri, who specialises in China-Australia relations, said the most serious repercussion of a poor relationship with China would be felt in the tourism and education industries.

"If there's a hint that it will affect the flow of international students or tourism, that would be a huge body blow," he said.

The move to halt its beef imports comes after customs officers in China claimed to have detected "repeated violations" of inspection and quarantine requirements by a "few" Australian beef export companies, foreign spokesperson Zhao Lijian claimed.

"The Chinese side has asked the Australian side to conduct a thorough investigation to find the cause and address the issue," the spokesperson said.

Nationals Senator Matt Canavan said the issue appeared to be about labelling stickers being the wrong way around and noted the Kilcoy abattoir was Chinese owned.

"We shouldn't jump to conclusions but it does underscore the need for us to diversify our trade relationships," he told the Today Show.

Relations with China soured rapidly after Australia launched a global push for an inquiry into the origins of the novel coronavirus.

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In response, China threatened to slap an 80 percent tariff on Australian barley.

Acting director of the Australia-China Relations Institute at UTS, James Laurenceson, said if this is the case it could cost Australia up to $600 million.

But he believes any tensions are temporary.

"[From] past experience, in Australia and overseas, is that economic punishment unleashed by China tends to be highly targeted and temporary," he told 10 daily.

"For that reason my base case remains it will not amplify into something much bigger... at this stage, speculating about a wider fallout is just that, speculation."

Australia was also recently described as “gum stuck to the bottom of China’s shoe,” by a Chinese state media editor.

And earlier this month, Beijing's ambassador in Canberra warned Chinese people would reconsider buying Australian beef if Prime Minister Scott Morrison continued to call for the investigation into the origin of the virus.

Experts say Australia should have confronted China privately about an inquiry rather than voicing it on a global scale. Image: AAP/Getty

"The issue of the origin and transmission of the virus needs to be assessed scientifically by medical professionals," Zhao said.

"Political manoeuvres under the context of the pandemic will only disrupt international anti-virus cooperation and won't gain any support."

Camilleri said it is fair to suggest the "technical issues" to do with the trade war are coming at a time which indicates it is linked to China's "increasing displeasure" with Australia.

It's hard to tell whether the latest blow will have an influence on the price of beef but since supply is greater, we could see a price drop.

"The industry will be banking on that this will be dealt with and trade will resume as normal. Catching up on any trade which has been lost is possible," he explained.

Laurenceson said there is a possibility tension will spill into other industries but Chinese businesses and consumers will always want what Australia is great at producing.

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On April 19, the Australian government called for an international, independent inquiry into the origins and spread of COVID-19, as well as the initial response by the World Health Organization.

"Despite unhappiness on the part of the Chinese government directed at Australia, those basic economic drivers pushing toward a stable trade relationship remain in place," he said.

However, Australia certainly isn't innocent in all of this.

"It greatly angered China when Australia asked for an international inquiry into the origin of the virus -- which would expect China to cooperate with whatever the inquiry asks for them," Camilleri said.

"I would guess Australia didn't privately canvass the issue with the Chinese before going public, which was a terrible mistake.

"Not only did they ask for an inquiry but they voiced it on a global scale."

Camilleri noted an inquiry is a perfectly reasonable response to the pandemic but Australia simply went about it the wrong way, infuriating the Chinese.

"We should consult our nearest neighbours -- like how does Indonesia or Malaysia feel about it? -- and make a joint approach privately," he told 10 daily.

"There's a lot of investigating that needs to be done."

Contact the author: elyons@networkten.com.au