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Mineral exports face new crackdown from China

China Customs
China Customs

Concerns are growing the industry could struggle to sell commodities to the nation’s largest trading partner after the communist country decided to delay processing of mineral shipments.

China Customs has announced new inspection rules for iron ore imported from Australia that will add more red tape for mining companies.

Starting from the beginning of June 2020 Chinese border authorities will manually check iron ore at the request of the trader or importer. Shipments were previously subject to a mandatory site inspection that was performed batch by batch.

Economic blackmail

University of New South Wales economist Tim Harcourt believes the Asian country could be using trade to pressure the Australian government to stop calling for an independent investigation into the origins of the Wuhan coronavirus (COVID-19). About 60 per cent of China’s iron ore comes from Australia.

“This is the usual China tactic with trade,” he told the Special Broadcasting Service. “They do not always want to slap tariffs on or fan things, but they do like to slow things down, and you see a lot of slow downs in customs and new techniques apply as a way of sending a message without actually being fined by the World Trade Organisation (WTO) for unfair trade practices.”

Liaocheng University chief research fellow Yu Lei used Chinese state-run media to warn the iron ore import changes were due to Australia’s push for an independent inquiry into COVID-19.

“This is another implicit warning to Australia,” he told the Global Times. “It is associated with how Australia has acted, and a general decline in demand for steel on the global level.”

The extra screening comes as the industry recovers from the impact of COVID-19 and iron ore spot prices finally return to pre-pandemic levels of more than 90 US cents (A$1.37) a tonne, according to Markets Insider.

Coal suffers too

Deputy Prime Minister Michael McCormack believes coal could be impacted too, following the Chinese regime’s advice to state-owned power plants to stop buying Australian thermal coal and choose domestic coal instead.

“Of course we are very concerned by it,” he said according to Australian Associated Press (AAP). “We want to make sure that our coal exports have a destination … but we have a two-way relationship with China. China needs Australia as much as Australia needs China.”

The Chinese Communist Party recently banned meat imports from four Australian abattoirs, including Dinmore, Beef City, Kilcoy Pastoral Company and Northern Cooperative Meat Company. The regime also said it would introduce a new 80 per cent tariff on Australian barley.

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Federal Trade Minister Simon Birmingham has tried to contact Beijing about the trade restrictions but communist officials are not responding.

Federal Home Affairs Minister Peter Dutton described “stonewalling” as one of the regime’s tactics, and is now considering whether to lodge a complaint at the WTO.

“We do not think they have got a legal basis for imposing these tariffs and we want them to change their position,” he said according to AAP.

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  • RCEP is the 1st among a pack of aces fielded by PRC in COVID times for the struggling nations of the ASEAN ! RCEP has knitted the ASEAN into the PRC garment.dindooohindoo

    The PRC has identified for the world,the “gateway to enter PRC”, via ASEAN. As time passes,wage increases and the rise in cost of living,in urban agglomerations,will provide the impetus to outsource,and shift manufacturing,to ASEAN.Rising costs are a signal,of the obsolescence of the business model and technology – and the driver,to re-engineer the manufacturing value chain.

    This outsourcing to ASEAN,will soak up the entire manufacturing capacity of ASEAN,boosting profits and wages in ASEAN nations.Chinese can partake in this wealth creation,in the ASEAN nations,as under:

    Lending to ASEAN companies by Chinese Banks like CCB etc.
    VC and PE stakes in ASEAN companies,with exits on the HKEX or NYSE
    JV with ASEAN companies

    Hence,there will be a continuous pipeline of transfer of technology and products from PRC to ASEAN at a competitive cost,and with a stand-by financing from Chinese Banks.

    This will make the ASEAN people and the ASEAN governments DEPENDENT on PRC,and enable ASEAN to be partners in the PRC success story.Thereafter,excluding Nippon and South Korea,no other nation will ally with the Americans,and might also,not allow their ports,to be used by the US Navy – as the financial and economic loss,will be tangible and huge – with no ostensible strategic benefits,to the ASEAN nations.

    RCEP has knitted the ASEAN into the PRC garment.

    Meanwhile PRC companies can focus on AI,Robotics and Nano to drive up the manufacturing value chain – with collaborations with EU companies and keep the Chinese skilled workers at the cutting edge of change.

    Simultaneous with the above, the RCEP region (minus Nippon and Australia) can use the Yuan as the FX and even conclude agreements with OPEC or Saudis,and other Break Bulk Raw Material supply nations,to settle all purchases in Yuan (for the RCEP,as trading block).

    History,Geneaology,Providence,Culture and Geography,have destined PRC and ASEAN,to be an integrated block.

    What place does India have,in the block ?

    Nippon and Aussies bring in technical and management excellence (which India never had )

    Pakistan HAS to be given a choice to join RCEP,on the thesis that any SEZ of PRC,or a ASEAN owned SEZ o/s ASEAN, with an investment of,in excess of say,USD 35 Billion,can be DEEMED to be an EXTENSION,of the RCEP.

    POST RCEP, The Path for EU manufacturers is as clear,as the white sand on a black clay beach.German manufacturers have to relocate to ASEAN,for manufacturing,and THEN export to PRC,else they will lose tarriff and non-tarriff costs,of at least 5-10%.

    For those who complain about manufacturing regulations in PRC,and the costly and complex legal systems in PRC,the solution is to make in ASEAN,and seek legal redressal in ASEAN – and further,export their output to PRC.This will also secure the EU manufacturers,who wish to secure their assets,in democracies”.

    The inevitable crisis of AI,Nano and Robotics,will make most humans redundant,even in EU manufacturing. The least the EU can do,is to offshore production to ASEAN,to crash the costs for EU consumers – so that,if the EU has to feed 200 million people (after they are rendered redundant),they can be fed at the lowest cost.

    If the EU is PROTECTING its markets and industry, from the Chinese invasion,and thus,forfeiting unrestricted access for EU exporters to the market of PRC – that is a disaster -as the current manufacturing in EU,will ,in any case, become obsolete.

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