China looks set to lift bans on Australian lobsters. Here’s what happened to the last items to make it back in

Beijing has promised to lift the ban on Australian rock lobster, and while that may be good news for the industry, not all products returning to China have enjoyed smooth sailing.

When the Chinese government lifted tariffs that had effectively wiped out Australia’s bottled wine exports to China in March, winemakers, connoisseurs and importers alike were excited.

While there had been worries about the damage the restrictions had done to Australia’s position in the huge Chinese market, people started buying up again.

In the three months following the lifting of the tariffs, more than $340 million worth of bottled wine was exported to China.

But in July that dropped right off with only $38 million being sold.

“Yesterday, I went to a local place called Marketplace, which is a high-end gourmet shop, to see ‘are any of these new Australian wines on the shelves?’,” said Beijing-based wine writer Jim Boyce, who runs a blog and newsletter called ‘Grape Wall of China’.

“There weren’t any, and the staff told me they don’t have any.

“So there may be wines pouring in, but there’s a difference between imports and sales.”

Less wine, more beef

China’s trade war on Australia began in 2020 after then-prime minister Scott Morrison called for an independent inquiry into the origins of COVID-19.

In the months following, Beijing put a raft of trade barriers on about $20 billion worth of Australian products.

But since Anthony Albanese’s government came into power, most restrictions have been lifted.

On Thursday, Mr Albanese met with Chinese Premier Li Qiang, and afterwards announced they had agreed on a “timetable” to let lobsters back by the end of this year, in time for Chinese New Year in early 2025.

Before the ban, rock lobster exports to China were worth some $700 million a year. A few weeks ago on visit to Beijing, the outstanding issue was raised by Treasurer Jim Chalmers.

In August 2023, tariffs on barley were removed and since, trade bans on most of the affected red meat processors have also been lifted, although two are still suspended.

Both of those products have bounced back — China is once again the biggest buyer of Australian barley, while beef has hit a key quota of exports about six weeks early.

“Since 2018 the priorities for Chinese consumers has changed,” Tian Zhang from AustCham China said in his first interview since being appointed CEO of the peak body representing Australian companies in China.

“Instead of having a purely pork-oriented diet, a lot of them are seeking out the higher protein beef products.

“[This is also] due to the safety concerns of the [pork] itself, and also the [lower] price point that’s coming in for Australian beef.

“For Australian beef, that actually gives us a lot of advantages.”

Australian red meat also has the advantage of not being completely locked out of the market as the bans are applied to individual processors instead of imports of the product as a whole.

But Australian wine has faced much more difficulty re-entering the market as China struggles through an economic downturn.

“Right now, wine consumption is about one third of 2012,” said Mr Boyce, speaking from one of Beijing’s most prestigious restaurants where Penfolds held its 180th anniversary celebrations not long after the tariffs were lifted.

“Australian wine came back at a time when people are very cautious about spending.

“Wine is an easy luxury to give up, it’s a newly acquired luxury for many people, and it’s quite expensive here, so if you’re going to give anything up, that’s what you’re going to give up.”

Margaret River winemaker Mike Gadd, who was in China visiting local producers, said those around the central Chinese province of Ningxia are also sensing a downturn.

“There’s a general nervousness in the market,” he said.

“Going around to the different wineries … talking to the winemakers, they definitely feel like it’s just a lot harder to sell the wine.

“Their feeling is there’s a contraction in the industry and going forward, there’s a bit of pessimism about where this is going to go.”

Adapting to a changing market 

In recent weeks, Chinese authorities have launched a raft of stimulus measures aimed at propping up the stock market, addressing the property crisis and boosting confidence among everyday consumers.

It was timed to coincide with the country’s national Golden Week holidays, which sees hundreds of millions of people travel across the country to vacation or see family.

The stock market soared off the back of the announcement, seeing the biggest single-day gains since 2008 on the day before closing for the holidays at the beginning of the month.

The rally continued when the markets reopened on Tuesday, although cooled quickly after expectations for more major stimulus were dashed during a morning press conference by the National Development and Reform Commission, the agency responsible for economic planning.

Chinese state media reported earlier this week that there had been a “significant tourism boost” during Golden Week.

“On Monday, the last day of the week-long National Day holidays, cross-regional passenger trips reached more than 278.76 million, up 5.2 per cent from the number during the same period in 2023, according to data released by the Ministry of Transport,” reported The Global Times.

On Tuesday, most of the gains fizzled, with Hong Kong’s Hang Seng Index experiencing its biggest one-day drop since 2008.

But the real challenges will hit now.

“For domestic tourism and consumption in holidays, there is not a big problem,” economist Alberto Lebrón said.

“The problem may come after holidays, when people can say, ‘OK I have spent a lot of money’ so by December, January, February … people will be more prone to save money.

“That is not good for the economy right now.”

In response to the changing market, Australian products are also having to adapt.

For example, when Australian wines weren’t flowing into China, Treasury Wine Estates — which produces and imports Penfolds — started incorporating Chinese and other origins wine into its offering.

Now the prestige brand has a new product called “One by Penfolds”, featuring wines from Australia, France, China and the US, which is sold on e-commerce sites, like Taobao for about $60 (288 RMB).

“China has defied all odds with the rapid expansion of its e-commerce,” Mr Zhang from AustCham said.

“The Australian wine producers understand that while we can’t sell direct through our (food and beverage) channels, the e-commerce channel is probably just as large and the opportunities are just as good.”