May 1, 2020 / 7:57 AM / 25 days ago

Australian PM's call for virus inquiry may harm long-term China trade - business leaders

SYDNEY (Reuters) - The Australian government’s diplomatic stoush with its largest trading partner China over Canberra’s push for a coronavirus inquiry has some of the nation’s top business leaders nervous that economic ties will become irreparably damaged.

Australian Prime Minister Scott Morrison reacts after attending the inauguration of Indonesia's President Joko Widodo for the second term, at the House of Representatives building in Jakarta, Indonesia, October 20, 2019. REUTERS/Willy Kurniawan/Files

Billionaire Kerry Stokes used the front page of his West Australian newspaper to warn against poking the country’s biggest customer in the eye, while iron ore magnate Andrew Forrest called for an inquiry to be delayed until after the U.S. presidential election.

“The reality is right now that business wants to trade with China,” David Olsson, president of the Australia China Business Council, told Australian Broadcasting Corp radio.

“Once consumer demand picks up again in China, there will be no other market in the short-to-medium term that will provide a market for our exports, which is so important for our recovery.”

With Australia’s total trade with China worth AU$235 billion annually, or a third of exports, businesses reliant on exports have questioned the timing of Prime Minister Scott Morrison’s push for an international inquiry into the coronavirus pandemic.

Foreign Minister Marise Payne played down a business backlash on Friday and said the government understood it was important to get a coronavirus investigation timing right.

The government would “protect both our national security and our economy”, Payne told Australian Broadcasting Corp radio.

China has rejected the call for an inquiry, labelling it anti-China, and its ambassador in Australia has warned Chinese consumers could boycott Australian wine, beef and universities.

Australia has sought to insulate the valuable trading relationship in previous disputes with China, but this time its trade minister joined other government ministers in accusing China of threatening “economic coercion”.

“In the current crisis, it’s never been more important for countries to cooperate to ensure we all get through this together,” said National Farmers Federation chief executive Tony Mahar.

Trade with China “will play an important role in the COVID-19 recovery of both countries” and food security was only possible through open trade, he said in a statement to Reuters.

China is the top market for Australian wine exports, already suffering from the worst bushfires on record.

“We would prefer that politics and business are kept separate, and diplomatic channels are the better way to deal with this”, Tony Battagene, chief executive of industry body Australian Grape and Wine, told Reuters.

Wine exporters experienced customs delays in China during diplomatic tensions in 2018, Battagene said.

“An inquiry is fine and great – I don’t think it is urgent,” he said.

Morrison said on Friday his call for a review had “a lot of support” and would be raised at the World Health Assembly next month through a European Union resolution.

Forrest, head of Fortescue Metals Group, upset the government by bringing a Chinese diplomat to speak at a press event he was holding with the health minister, to promote 10 million COVID-19 testing kits he had imported from China.

“Australia needs to walk that line where we can have a best friend in America, we can have best friend in China, we can have best friends across South East Asia,” he said in a radio interview.

Other industry groups told Reuters they were unhappy with the diplomatic dispute, but didn’t want to publicly criticise the Australian government’s tactics, because they feared this could be used in Chinese propaganda.

Reporting by Kirsty Needham; Editing by Michael Perry

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