Australian Treasurer Josh Frydenberg on Monday said Australia must diversify its economy to protect itself from economic over reliance on China, its largest trading partner. He alerted the country’s businesses to brace for new tensions with Beijing.
Australia’s relations with China has gone bitter after it banned Huawei from its 5G broadband network in 2018 and soured further after it called for an independent investigation into the origins of Covid-19, that was first reported in China last year.
China has responded by imposing tariffs on Australian products such as Barley, Wine, Grapes, Seafood, and Coal.
“It is no secret that China has recently sought to target Australia’s economy,” Frydenberg said in a speech in Canberra. “Heightened strategic competition is the new reality we face, now and likely into the future.”
To diversify the country’s economy and build resilience for any future shocks from China, Frydenberg said businesses should look at other export options that have opened as a result of recent free trade agreements.
Australia’s A$2 trillion economy is at risk of entering its second recession as its largest states are in prolonged COVID-19 lockdowns and on Sunday 1,684 fresh new virus cases were recorded.
Despite the diplomatic tensions, Australia has exported A$ 19.4 billion worth of goods to China in the 12 months to July 31.