The return of Australian wine to China orders has risen sharply, and Sino-Australian trade is expected to break through again

The return of Australian wine to the Chinese market is a foregone conclusion.

On March 28, China's Ministry of Commerce issued an announcement announcing that it would terminate anti-dumping and countervailing duties on import-related wines originating in Australia from March 29. The Ministry of Commerce said in the announcement that in view of the changes in the relevant wine market in China, it is no longer necessary to impose anti-dumping and countervailing duties on imported wines originating in Australia.

At the same time, information from the World Trade Organization (WTO) shows that China and Australia have submitted a notice to the WTO Dispute Settlement Body to reach a mutually agreed solution to the "China Anti-dumping and Countervailing Duty Measures on Australian Wines". The circular was circulated to other WTO members on April 3 local time.

According to Rob Donelly, Commercial Minister at the Australian Embassy in Beijing and General Manager of Greater China at Austrade, the removal of all tariffs on Chinese bottled wine imports from Australia is an important outcome for Australia and the Australian wine industry. "The return of Australian bottled wine to the Chinese market will benefit both Australian producers and Chinese consumers," he told CBN. ”

As for "how quickly" Australian wine can regain its share of the Chinese market, Tang told Yicai that exporters will re-establish contact with importers and customers, so the process will take a long time and patience, "However, the outcome of this negotiation paves the way for Australian exporters who were otherwise unable to export bottled wine to the Chinese market to return to the Chinese market sooner." ”

The trade chain reacted quickly, with the first containers of Australian wine destined for China leaving the Port of Adelaide at the end of March.

How quickly will China market share be restored?

Mr Tang said that in light of the changes to the technical requirements for product labelling and registration, Austrade will continue to work with industry bodies such as Wine Australia and state and territory governments to help Australian exporters prepare to re-enter the Chinese market.

Tang Ruibo also said that this year, Australia will increase the promotion of Australian wine in the Chinese market, for example, will lead a delegation of Chinese buyers to participate in Vinexpo Asia 2024 in Hong Kong, China, in May, where it will be hosted by Wine Australia Pavilion to carry out docking exchanges with Australian wine brands. At the same time, Wine Australia plans to hold a roadshow of Australian wine brands in four cities in China at the end of August.

Martin Cole, CEO of Wine Australia, said: "China is the most important and valuable export market for Australian wines. Over the years, Australian wine businesses have developed strong links with Australian wine importers, buyers and consumers in China, and these relationships remain very important to our wine industry. "It's gratifying to know that Australian wine remains very popular with traders and consumers in China." ”

Yicai noticed that Wine Australia has opened a special webpage on its official website to include the latest developments in the Chinese market. The website also provides answers to frequently asked questions about wine exports to China, as well as a redirect to the English and Chinese versions of the "Guide to Exporting to China", which sets out the latest Chinese government regulations on wine imports for Australian exporters.

"There are some wineries that will definitely be quickly ready to export wine to the Chinese market," Kohler told CBN, "and we will fully support Australian wineries to re-enter China, and we are very much looking forward to meeting our old friends in the Chinese wine industry again." ”

China was once Australia's largest wine export market. According to statistics from the General Administration of Customs, between 2015 and 2019, the volume of wine imported by China from Australia doubled from 56,642 thousand liters to 120811 thousand liters. Especially in 2019, according to the China-Australia Free Trade Agreement, after the implementation of the fifth round of product tariff reduction, Australian wine imports entered the era of "zero tariff". In that year, China and Australia also surpassed French wine imports, ranking first in the total share. According to Australian data, wine exports to China reached $1.3 billion in 2019, more than exports to the United States, the United Kingdom, Canada, Singapore and other countries combined.

As Australia's most populous state, NSW has 14 wine regions with 42,000 hectares of vineyards and a wide range of wines, including Australia's most famous wine region, the Hunter Valley. Since the second half of last year, with the increase in China-Australia routes and the rebound in the number of tourists, the local Australian wine industry has seen new hope and opportunities.

Kohler also noted the data and said: "The wine market in China is very different from four years ago. There is a significant link between China's overall consumption and wine imports. Our desire is to ensure that Chinese consumers once again have the opportunity to enjoy Australian wines, and believe that over time, Australian wines will once again become the favourites of many wine lovers in China. ”

According to Trade Date Monitor, China's largest wine sources in 2023 are France, Chile, Italy and Spain, but imports from these countries have all fallen sharply, by 29%, 18%, 31% and 48%, respectively.

Kohler does not expect Australian wine exports to China to return to 2020 levels immediately, and "wineries will now prioritise relationships with Chinese importers, buyers and consumers and look forward to returning to the market." ”

At the end of March, Randall Wine Group, one of Australia's largest privately owned producers, said it had received orders for about 156,000 bottles just hours after the new tariffs were announced. Australian wine giant Treasury Wine Estates has also been quick to respond by raising the price of its Penfolds range of ultra-premium wines from July 1.

What are the other potential areas for economic and trade cooperation?

This year marks the 10th anniversary of the establishment of the China-Australia Comprehensive Strategic Partnership.

Over the past 10 years, bilateral relations have had ups and downs. The Australian government's China policy has led to a decline in bilateral relations since 2018. In May 2022, Australia's current Labor government recalibrated its China policy, and bilateral relations began to turn around.

Chen Hong, director of the Center for Australian Studies at East China Normal University, previously told Yicai that there will always be disputes or frictions in any international trade, and to solve these problems, economic and trade issues should not be politicized or fought like the previous Australian government, otherwise it will not only be useless, but will even worsen and intensify the situation, "(Australia's current Prime Minister) Albanese has sent a clear signal that he wants to negotiate with China on these issues, so he has also received a positive response from China." ”

In terms of economy and trade, China has been Australia's largest trading partner for 15 consecutive years, and is not only Australia's largest export destination, but also the largest source of imports. With the improvement of bilateral relations, trade between the two sides has become smoother.

According to Xinhua News Agency, Chinese Ambassador to Australia Xiao Qian said at the beginning of the year that China-Australia trade volume will reach a new high in 2023, and positive progress has been made in investment cooperation. According to the Australian Bureau of Statistics, in the first 11 months of last year, the trade in goods between the two countries was about 281.263 billion Australian dollars (about 1.34 trillion yuan), a year-on-year increase of 8.52%. Australian coal, logs, barley, hay and other products have returned to the Chinese market.

As for other new areas of cooperation, Tang said that China is Australia's largest trading partner and sees many opportunities for cooperation, such as working together to achieve a common net-zero goal, Australia can meet the needs of Chinese consumers by supplying clean, green and safe products, and providing world-class international education for Chinese students.

According to Tourism Australia, domestic and foreign tourists contributed a record $51.4 billion to NSW's tourism revenue as of December 2023, according to Tourism Australia (TRA) data. Among them, the recovery momentum of Chinese tourists to Australia is strong, ranking fourth in the international source market of New South Wales.

Chen Hong is optimistic about the future cooperation between the two sides in clean energy. "For a long time, Australia has a sparsely populated land and abundant sunshine, but the manufacturing capacity of photovoltaic products of Australian companies is insufficient; in terms of wind energy, Australia has a long coastline, but its energy production and maintenance capacity using sea breeze lags behind; the proportion of electric vehicles used in Australia is very small, mainly because it does not produce itself, and imported Tesla is particularly expensive. "Australia now has a net-zero target and needs to transition in the energy sector." Therefore, it is very much hoped that cooperation with China in the field of clean energy will be strengthened. ”

According to the China Trade Remedy Information Network of the Ministry of Commerce, there are currently three trade disputes between China and Australia under the WTO, namely wind towers, railway wheels and stainless steel sink products exported by China to Australia, all of which are still under Australia's trade measures. However, on March 15, the Australian Anti-Dumping Committee made a decision not to continue to implement anti-dumping measures on Chinese wind tower products from April 16, 2024. In this regard, He Yadong, spokesman of the Ministry of Commerce of China, welcomed this at a regular press conference on March 21. He said: "We hope that Australia and China will continue to resolve differences in the field of trade through dialogue and cooperation, and terminate other trade remedy measures against China at an early date." ”

(This article is from Yicai)