Wine, Lobsters Could Be Next in China-Australia Trade Thaw
Comment of the Day

January 06 2023

Commentary by Eoin Treacy

Wine, Lobsters Could Be Next in China-Australia Trade Thaw

This article from Bloomberg may be of interest. Here is a section:

China’s trade restrictions on Australian wine, lobsters and other commodities could be the next to ease amid a warming of diplomatic ties and expectations that Beijing will soon resume imports of coal.

Curbs on commodity imports will probably be eased gradually and in an unofficial manner, said Hans Hendrischke, professor of Chinese Business and Management at the University of Sydney. While there’s some confidence that restrictions will be lifted, there’s currently no indication of timing, he said.

“Nobody could tell you whether it will start with barley, wine producers or lobsters for Chinese New Year,” Hendrischke said.

Eoin Treacy's view

China’s boycott of Australian products has been a burden for the economy as inflationary pressures pushed up interest rates and pressured the property market. The prospect of increasing Chinese demand is now helping to support the currency which should ease some of the inflationary pressures.

The Australian Dollar closed the week above the 200-day MA for the first time since April. A clear downward dynamic will be required to question medium-term scope for continued upside.

S&P/ASX 200 Index reversed an intraweek decline to close back above the psychological 7000. That confirms a higher reaction low and suggests potential for a further rebound towards the highs above 7500.

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