An overview of an Australian flag is seen outside the Great Hall of the People on April 9, 2013 in Beijing, China.
Feng Li | Getty Images
Australia needs to diversify its economy to depend less on China, its largest trading partner, Treasurer Josh Frydenberg said Monday, as he warned companies to prepare for new tensions with Beijing.
Australia’s relations with China worsened after Huawei banned its 5G broadband network in 2018 and cooled after Canberra called for an independent investigation into the origins of Covid-19, which was reported by first time in China last year.
Beijing responded by imposing tariffs on Australian commodities, including barley, wine and grapes.
“It’s no secret that China has recently tried to target the Australian economy,” Frydenberg said in a speech in Canberra.
“The highest strategic competition is the new reality we face, now and probably in the future.”
Frydenberg said companies should look at new markets, which have opened up as a result of recent free trade agreements.
The $ 2 trillion Australian economy is at risk of entering its second recession in as many years as its largest states are in prolonged Covid-19 closures.
Despite diplomatic tensions, exports to China reached a record 19.4 billion Australian dollars during the twelve months to July 31, 72% more than the previous twelve-month period, due to strong ore demand of iron.