The Morrison government is pushing back against Chinese threats to use trade to punish Australia over its visa offer to Hongkongers, saying it expects Beijing to honour its trade obligations.

Chen Hong, director of the Australian Studies Centre at East China Normal University, said the Morrison government’s permanent residency pathway and efforts to lure Hong Kong businesses to relocate to Australia “outrages and contests Chinas sovereignty”.
“This is highly provocative and will further damage the bilateral relationship. Morrison attempts to alienate people of Hong Kong from the Chinese mainland, to stir up more hostility instead of promoting stability,” he said.
With relations between Canberra and Beijing at an all time low, China has warned tourists and students against visiting Australia, imposed punitive tariffs on barley and blocked beef exports from four abattoirs.
Trade Minister Simon Birmingham said he would be disappointed if China used trade to retaliate over the Hong Kong decision.
“We don’t so we don’t think that our actions, which we think are proportionate and targeted, warrant that type of a reaction by China,” he said.
“We think that the trade commitments we’ve made to one another, both through China’s ascension to the World Trade Organisation a number of years ago, and then subsequent to that, through the China-Australia Free Trade Agreement ought to be honoured.
“And Australia certainly continues to uphold our end of the bargain, and we trust that China will do likewise.”
Commonwealth Bank economists have an upbeat assessment that Australian exporters could withstand any China trade shocks, saying they will be able to substitute demand from China better than many people think because of the rapid growth in exports to other countries.
The CBA’s analysis of Australia’s trade with China shows there is a risk that Chinese demand for Australian exports will not recover even after the COVID-19 crisis because of increased tension between the two countries.
But the bank’s economists say the growth in exports to countries across several sectors such as education, tourism and commodities such as iron ore means Australia may not face as dire a future as some expect even though China makes up 38 per cent of our exports.
“There is a risk that Australias tourism and education exports to China dont recover once the borders are reopened as Chinese authorities have warned citizens from travelling to Australia,” CBA economist Kristina Clifton said.
“However over the medium term, its possible that a significant proportion of this spending could be replaced by attracting students and tourists from other countries. India, Nepal, Brazil and Vietnam are also important sources of international students and numbers could be increased from these and other countries.”
The economist’s view on substitution is much the same for iron ore exports.
“It would not be possible for China to source the iron ore that it needs from other countries without paying a significantly higher price,” Ms Clifton said.