Australian agriculture and seafood exporters facing financial ruin are desperate to reconnect trade with the Chinese market, as green shoots appear following an easing of the coronavirus pandemic there.
But one economic expert has warned China’s economic recovery is not assured.
Before the pandemic, Brad Adams’ ASX-listed export company Ocean Grown Abalone had a market value of $30 million, but that has now halved.
He is among countless Australian seafood exporters desperate to reconnect the airfreight supply chain to get his product to key export markets.
“We’re like restaurants. If we can’t sell our product, we can’t survive,” Mr Adams said.
“To have all airlines around the world grounded has ground world trade to a halt for these perishable products.”
Mr Adams said the cost to send airfreight had doubled and, in some cases, quadrupled, making it uneconomic for many producers.
On the other hand, Mr Adams said the Chinese economy was beginning to show signs of recovery and that demand for his produce still existed he was just unable to get it to market.
Ocean Grown Abalone is the biggest employer in the regional town of Augusta, in Western Australia’s South West, and the company has had to halve production and lay off staff while the borders are closed.
“When the market was closed, it was shut up shop, stop fishing, don’t go to work,” he said.
“As China comes out the other side of the virus, we’re seeing the orders are starting to return.”
Lowy Institute Senior Fellow, Richard McGregor, said the Chinese economy was showing some signs of repair, but warned the recovery was far from certain.
“It is certainly true the productive capacity of the Chinese economy is starting to get back on its feet,” he said.
“Workers are starting to get back into factories, they’re beginning to produce goods but that’s only one side of the equation.”
The other side of the equation is demand.
Many Chinese citizens have gone two to three months with no income and Mr McGregor said there was not a great deal of pent-up demand from the Middle Kingdom.
The COVID-19 pandemic has also created some issues for China’s exports.
“Outside China, just at a time when they’d like to sell more to foreign countries, those countries’ economies are starting to go downhill rapidly,” Mr McGregor said.
“There’s still a lot of demand in China, and a collapse in demand outside China, so that makes it difficult.”
2020 ABC