Ahead of a Friday meeting with Commerce Minister Wang Wentao, and other senior political leaders, Farrell used the first visit by an Australian trade minister to China in four years to talk business with China Baowu Steel Group executives.

The company is the world’s biggest steelmaker and is considering a large new investment in a Western Australia green steel plant. Still, Chairman, Chen Dorong reminded Farrell the state-owned business is the largest purchaser of Australian iron ore and new investment could go to Africa, South America or the Middle East.

But he praised Prime Minister Anthony Albanese in the meeting, an indication the Chinese business community supports the normalisation of trade ties after rocky years of sanctions and a war of words between Beijing and Canberra.

Farrell notes his visit coincides with the 50th anniversary of a previous Labor trade minister, Jim Cairns, travelling to China as iron ore sales got under way.

Success on the visit for Farrell would mean an end to Australia’s deteriorating relations with China, a problem that dates back more than five years.

The Turnbull government’s decision to ban Chinese telco giant Huawei from Australia’s 5G communications network rollout, and the passage of world-leading foreign interference laws, angered the Chinese as far back as 2018. At the same time, China was boosting efforts to influence domestic politics overseas, while also flexing its military muscle around the world.

As President Xi Jinping consolidated his power at the top of the Chinese Communist Party, the Morrison government’s calls for an independent investigation into the origins of the COVID-19 pandemic inflamed existing tensions.

Then came an anti-dumping probe into Australian barley imports. The review was used to introduce damaging tariffs as reports emerged that multiple shipments of Australian coal were struggling to clear Chinese ports. Later instructions were distributed to stop the purchase of Australian wine, cotton, copper and seafood, hurting the producers behind exports otherwise destined for China.

Start of a thaw

While the former Coalition government maintained a hardline stance against China, Labor under Albanese started to push for a reset of relations after winning government in last year’s May election. This week, Farrell heard that things were beginning to turn around.


Australian businesses were getting back to some kind of normality, said Vaughn Barber, chairman of the China-Australia Chamber of Commerce (AustCham). He hopes for an end to the trade blockages to allow further growth for companies exporting to China.

“As a result of those improved atmospherics, and the charm offensive that the Chinese leadership has been undertaking to attract foreign investment, big Australian companies now are pushing on an open door in relation to the opportunities in the market here.

“Of course as a next step, the elimination of trade blockages on some of Australia’s trade with China would remove another key challenge … It would be a win-win outcome for Australian exporters, but also Chinese importers and consumers here in the market.”

Heidi Dugan, the Australian personality who has her own TV show and a loyal social media following in China, is an AustCham director. She told the Australian embassy event that new products were coming from Australia, as the country was fully reopening from COVID-19 disruption.

Heidl Dugan says new products are arriving into China from Australia. 

Changes in cosmetic testing laws had seen a boom in skin care and makeup imports, just one of a number of emerging areas of new business supported by local officials.

“It’s a real change in the air,” she said. “There’s now that feeling of excitement, of wanting to do something. We see that willingness and excitement, and it’s great,” she said.

Beijing is willing to work with Australia to implement new co-operation and properly handle differences, said Foreign Ministry spokeswoman Wang Wenbin.

“The economic structures of the two countries are highly complementary,” Wang told reporters earlier this week. “Bilateral economic and trade cooperation is a mutual benefit and win-win, [and] improving, maintaining and developing China-Australia relations are in the fundamental interests of the two countries and the two peoples.”

While a visit by Albanese to China is on the cards for later in the year, Australian officials were cautious about suggesting any major, near-term breakthrough.


But extensive talks took place this week in a joint ministerial forum between Farrell and his Chinese counterpart. Farrell likes the face-to-face interaction and had an unexpectedly warm virtual meeting with Wang earlier this year.

Incremental improvements

The federal government takes heart from the fact that each time ministers have talked in the last few months, improvements in relations have followed. China and Australia shared two-way goods trade worth $287 billion in 2022, representing 28 per cent of Australia’s total goods trade with the world.

But the ongoing uncertainty is hurting possible investment by Australian companies; Beijing business figures say potential new entrants to the massive consumer market are struggling to understand the situation on the ground.

On Friday, Farrell met the chairman of China Oil and Foodstuff Corporation (COFCO), the country’s largest foodstuff and agriculture supplier, which buys Australian wheat and oats.

Before Beijing slapped trade duties on Australian products, COFCO bought about 30 per cent of its wine from Australia, in value terms, including from Treasury Wine Estate and Australian Vintage.

Farrell used the meeting to reiterate his message that Australia is a reliable supplier of safe and high quality agricultural products.

Before the key meeting on Friday afternoon, Farrell visited the April Gourmet supermarket; it stocks Australian household names such as Tim Tams, Coopers Beer, Penfolds wine and Leggos pasta sauce.

“My message to business leaders is persevere and persist. There’s not just one thing that’s going to solve the issue,” the trade minister said.

“You’ve just got to keep working at it. There have been some very positive signs, but there is more to be done.”