This Week in Asia

Grapes of wrath: dark clouds for Australian winemakers as China ties sour

Set in the rolling green hills outside the Queensland capital of Brisbane, Sirromet Winery has placed big bets on China. Exports of its Australian vintage now make up 30 per cent of its total sales, double what it was five years ago. Such is its popularity that Sirromet is now visited regularly by tourists from mainland China, necessitating the need for dedicated Mandarin speaking guides.

"The Chinese really buy into the quality of the product and the fact it's natural and grown in a clean environment," says Sirromet general manager Rod Hill.

But dark clouds are appearing for Australian winemakers such as Sirromet. The booming billion-dollar export trade to China is souring amid increasingly acrimonious relations between Beijing and Canberra. Australia often says its economic prosperity is linked to China, its biggest trading partner. But what happens when a country's biggest trading partner is also accused of meddling in its internal affairs causing a deterioration in relations not seen since the dark days of the cold war?

Chinese tourists sample wine at an Australian vintner. Photo: Reuters

Last year, Australian journalists on a study tour of the mainland were warned of a possible boycott of a wide range of Australian goods because of what China calls unfounded accusations against the mainland. Now, with bottles of Australian Chardonnay and Riesling languishing dockside, those warnings appear to have been at least partly correct.

Beijing, which until recently had considered Australia a reliable trading partner best known for blue skies, koalas and kangaroos is increasingly angry at Australia for what it considers politically motivated attacks on Chinese citizens living in Australia.

Business is booming for Australian vineyards, but things could change if the country's ties with China sour. Photo: Reuters

Sirromet's Hill says his winery has not noticed any delays, but he says they are a smaller operation than Treasury with a lot of sales direct to consumers. Wine has been seen as the rising star of Australian exports. Excluding Hong Kong, Chinese sales hit A$848 million (US$644 million) last year, more than doubling since a free-trade agreement between Australia and China took effect in 2015.

Now that promising growth is seen as under threat as the diplomatic language gets more heated.

China Daily accused Prime Minister Malcolm Turnbull of being "China-basher-in-chief" after his statement last year that Australia was "standing up" to Beijing. Former prime minister John Howard - a man not known for cosying up to Australia's Asian neighbours - recently advised the government to mend its fences with Beijing. According to Beijing officials, Canberra's increasingly tough attitude towards China reflects a "cold war mentality" and, in some cases, is a racially based attempt to make China a "scapegoat" for political point scoring. As one Chinese academic put it: Australia's "body is in Asia, but its mind is in the West".

Prime Minister Malcolm Turnbull: Australia's China-basher-in-chief? Photo: AP

Australian businesses are increasingly the meat in the sandwich of these increasingly nasty exchanges. The high-profile wine sector is not likely to be the only victim. Australian beef and citrus producers along with some in the hi-tech sector now also fear a loss of export markets or investments if relations do not improve.

Andrea Myles, chief executive of the China Australia Millennial Project, has noticed a disturbing hostility towards Australia among the business community in China. "People are starting to say that we don't want to invest in Australia and why does Australia hate China," says Myles, whose organisation runs an annual exchange between young Chinese and Australian entrepreneurs.

Excluding Hong Kong, Chinese bought A$848 million worth of Australian wine last year. Photo: Reuters

This article originally appeared on the South China Morning Post (SCMP).

Copyright (c) 2018. South China Morning Post Publishers Ltd. All rights reserved.

More from This Week in Asia

This Week in Asia5 min read
Royal Mess: From A Palace Murder To A Purged Princess, Asia's Aristocrats Have Been Rocked By Scandal
Members of the Nepalese royal family " Crown Prince Dipendra, King Birendra, Prince Nirajan, Queen Aiswarya and Princess Shuriti " pictured in 1990. Photo: Reuters MASSACRE IN THE PALACE It was the night of June 1, 2001 when Narayanhity Palace, the r
This Week in Asia5 min read
Why Hong Kong Should Accept E-cigarettes If It Wants A Smoke-free Future
The Hong Kong government's plan to remove e-cigarettes and other novel tobacco products from the market by prohibiting their sale, import and marketing is a regressive step in tobacco control. It is likely to hinder, rather than help, efforts to redu
This Week in Asia6 min readSociety
The Invisible Struggle: How Thousands Of Female Migrant Workers Lose Their Money And Their Children Every Year
Lidia's son turned nine this month in Sri Lanka, but she did not have the chance to sing him a birthday song. From Hong Kong, where she works as a domestic worker, Lidia cries over the distance that grew between them. "My husband does not allow me to