Beijing appears intent to push back against efforts to investigate the early handling of the COVID-19 outbreak in China, this week introducing retaliatory trade measures against Australia and limiting access for WHO investigators. Already strained this year, Sino-Australian relations took a further dive this week, after Beijing quietly imposed import restrictions on a range of Australian products. On November 3, the South China Morning Post’s Su-Lin Tan and William Zheng reported that a wide variety of Australian exports are expected to be barred from entry from Friday, including hundreds of millions of dollars worth of wheat:

China is expected to ban imports of Australian wheat, putting a A$560 million (US$394 million) trade in doubt, with the grain the latest to join a list of new blocks on Australian products, according to industry sources.

From Friday, barley, sugar, red wine, timber, coal, lobster, copper ore and copper concentrates from Australia, are expected to be barred from China even if the goods have been paid for and have arrived at ports. The ban on wheat is likely to follow, although a date has not yet been set, sources said.

It is understood that Beijing will communicate the bans to all Chinese state-owned and private traders by Tuesday. Traders who have already been notified said no formal document was issued nor were reasons provided. [Source]

Over the course of this year, China has introduced a series of trade restrictions on imports from Australia. Observers believe that these moves have come in response to Australia’s concerted advocacy for an international investigation into the origins of the COVID-19 pandemic, a move that China’s ambassador to Australia has called “dangerous.” In May, China suspended imports of Australian beef in a move that was widely regarded as retaliatory.

Since then, Sino-Australian trade relations have continued to deteriorate, threatening to impact the agricultural sector and also the tourism industry after Beijing issued warnings to its citizens against travel to Australia citing a “marked increase in racial discrimination and violence.” China is Australia’s largest trading partner, taking in 34.3% of the country’s exports last year. In a report released at the end of last month, it was estimated that China’s widening trade actions against Australia have cost up to USD 19 billion a year.

The lack of an official announcement from Beijing on this week’s import bans has sparked confusion, and led Australian producers to appeal to their government for clarity about the fate of their goods. Adding to the uncertainty, the Chinese commerce ministry denied the existence of the import ban on Wednesday. From The Guardian’s Daniel Hurst:

With other industry groups also on edge about the reports, the trade minister, Simon Birmingham, declared on Wednesday that Australia expected its biggest trading partner to “play by the rules”. He urged Beijing to provide certainty and answers to Australian and Chinese businesses that faced potential disruptions.

China’s commerce ministry has so far denied as “rumours” the reports, first published by the South China Morning Post earlier this week, that it had met with Chinese import businesses to flag new curbs on shipments of Australian wine, lobster, sugar, coal, timber, wool, barley and copper.

Birmingham indicated the Australian government was still trying to ascertain precisely what was happening on the ground, and “the proof will be in the pudding over the coming days”. [Source]

Beijing’s ability to flex its “geoeconomic muscle” towards Australia has in part been made possible by its changing trade dynamics with other countries. That threatens to sow tensions between countries that have worked together in the past on confronting Beijing. For The Diplomat, Abhijnan Rej wrote that Beijing’s pressure on Australia is enabled in part by its trade obligations with the U.S. under the U.S.-China Phase One trade deal:

Robert Blackwill and Jennifer Harris in their 2016 book on geoeconomics formally defined it as the use of economic and financial tools by a state to advance its foreign policy goals. They described China as the “world’s leading practitioner of geoeconomics,” quoting an observer who noted that “[n]ations do not fear China’s military might; they fear its ability to give or withhold trade and investments.” What is interesting is how China’s economic statecraft has grown more sophisticated since, where Beijing is also using trade as means to drive a wedge between allies or pitch one against the other.

As the SCMP report notes, one of the reasons why China can afford to ban import of Australian wheat is that as it seeks to conclude the first phase of its trade deal with the United States struck in January this year, it agreed to purchase an additional $32 billion dollars of U.S. agricultural products — including wheat, whose sale to China is now almost at a five-year high — even as China has increased its wheat stockpile in the last few months from other sources including France and Canada. (The United States is the world’s second largest wheat exporter, after Russia.) This means that Chinese wheat imports have become a zero-sum game between American allies: The United States’ and others’ gains are, effectively, at the expense of Australia’s losses. [Source]

Finally, after initial high-profile agreement, Beijing has been working hard to resist pressure from the WHO to investigate its handling of COVID-19. The embattled U.N. body has faced extensive criticism from Donald Trump, who initiated the process to withdraw the U.S. from the organization in July of this year. An extensive story published by Selam Gebrekidan, Matt Apuzzo, Amy Qin, and Javier Hernández for the New York Times documented how Beijing confounded efforts by WHO investigators to look into the origin of the virus, which is no longer believed to have first emerged from the live-animal market in Wuhan:

Internal documents and interviews with more than 50 public-health officials, scientists and diplomats provide an inside look at how a disempowered World Health Organization, eager to win access and cooperation from China, has struggled to achieve either. Its solicitous approach has given space for Mr. Trump and his allies to push speculation and unfounded conspiracy theories, and deflect blame for their own mistakes.

The prospect of an apolitical inquiry into the virus’s origins is dwindling. China has extracted concessions from the health organization that have helped the country delay important research and spared its government a potentially embarrassing review of its early response to the outbreak.

[…] On the origins of the virus, the [WHO] experts mostly shifted the onus to China, asking the government to prioritize a “rigorous investigation.” But they also assured people that numerous investigations were underway.

“It was an absolute whitewash,” said Lawrence O. Gostin, a professor of global health law at Georgetown University. “But the answer was, that was the best they could negotiate with Xi Jinping.” [Source]

Notably, the article doesn’t pin all of the blame for the WHO’s failings on Beijing. Calling the WHO’s engagement with China “the diplomacy of effusive praise,” the Times’ reporters go on to cover internal dissent against the WHO’s solicitous approach to Beijing: “The W.H.O. prioritizes access to the country,” Gian Luca Burci, a former legal counsel to the WHO, told the Times. “But if you do that to the bitter end, you lose soft power.”