India set to benefit as China-Australia trade war shows no sign of abating

Washington [US], February 18 : Despite recent signs of a diplomatic thaw, nothing has changed in the policies of either China or Australia, reports the Diplomat.
China and Australia's top trade officials met for the first time since 2019. Although Chinese Commerce Minister Wang Wentao described the talks with his Australian counterpart, Don Farrell, as an important step in getting bilateral economic and trade cooperation back on track, it is unlikely that there will be any significant improvement in bilateral economic relations between the two countries, the Diplomat reported.
Wang warned that trade disputes would not be resolved any time soon. Chinese officials have argued that Australia must first take steps to stem the decline in bilateral relations and create a better atmosphere for talks.
The Diplomat reported that Xi will never admit that he is the one who capitulated after a failed two-and-a-half-year strategy to make an example of Australia by cutting off ties and imposing trade sanctions. Over two years of trade restrictions have failed to bring Australia to heel.
Recent reports suggest that Beijing's economic sanctions against Australia have been ineffective. Instead, the Chinese Communist Party (CCP) has been forced to live with an increasingly critical Australia.
Taking the opportunity to indirectly slam China, the External Affairs Minister of India, S Jaishankar said in Sydney on Saturday that the rise of China, the rise of its share in the global economy and technology, global influence are a matter of concern. But he said firmly that this decade we will see many more powers who will have more influence on global debates and global outcomes.
China's aggressive foreign policy has made it unpopular with Australians.
When the CCP used diplomatic and economic coercion to punish Australia for calling for an investigation into the origins of COVID-19, it turned even more Australians against China. Negative sentiment toward China remains high in Australia. A recent poll shows that three-quarters of Australians believe that China could become a severe military threat within the next two decades. This poses a serious problem for any move toward normalization, as reported by the diplomat.
Australia has found new markets for its exports by redirecting its exports to countries like India and Mexico.
Under Albanese, Australia is continuing many of the same bilateral and multilateral efforts carried over from the regime of his predecessor, Scott Morrison. These include working with the United States, Japan, and India as a part of the Quadrilateral Security Dialogue (commonly known as the Quad); working with India and Japan to improve supply chain resilience; continuing a new security pact with the United States and the United Kingdom on nuclear submarine development; launching a new security agreement with Japan; and engaging deeply with Pacific Island states such as Fiji, Samoa, and Tonga.
Notably, EAM Jaishankar also visited Fiji earlier this week and signed several MoUs.
Fiji Prime Minister Sitiveni Rabuka on Thursday also said India stood by his country in times of great need and will always be a special friend and trusted partner.
"I'm pleased to say that India will always be a special friend and trusted partner to Fiji," the Fiji Prime Minister said during a joint press statement with External Affairs Minister S Jaishankar in Suva, Fiji on Thursday.
Noting that he discussed bilateral cooperation during his meeting with External Affairs S Jaishankar, Fiji Prime Minister Sitiveni Ligamamada Rabuka on Thursday indicated that China did not figure in the meeting and they thought it was "bad manners to talk about somebody who is not in the building".
On the other hand, the Australian government is also working hard to build relationships and partnerships with Pacific Island nations, including India, and other middle powers in the Indo-Pacific. There are also reports of a plan to station six U.S. B-52 bombers, which have nuclear weapons capability, in northern Australia at Tyndall Air Force Base. In addition, Australia plans to build 11 large storage tanks for jet fuel, providing the United States with refuelling capacity closer to China than its main fuel depot in Hawaii. The above measures, along with the signing of AUKUS (the trilateral security pact between Australia, the U.K., and the U.S.), make clear that Canberra will not bow to Beijing's increasingly assertive political and military posture in the region, even if it harms Australia's own economic interests in the short term.
According to a recent Australian media report, the only products China is buying from Australia are things that it absolutely needs and isn't readily available elsewhere.
The political dynamic reached a low point in 2020 when Australia called for an independent investigation into the origins of the COVID-19 pandemic. For Beijing, this was seen as a direct attack on China's reputation and the latest in what the Chinese regime called a "series of misguided actions" by Canberra.
In the months that followed, Chinese authorities suspended import licenses for major Australian beef producers, ordered several power plants and steel mills to stop buying Australian coal, and imposed punitive tariffs on Australian barley and wine.
Australia is actively looking for other economic partners. In late 2022, it signed the Australia-India Economic Cooperation and Trade Agreement, in which the two countries agreed to cut tariffs on goods by more than 85 per cent to reduce their dependence on China.
In response to China's economic coercion, mutual assistance has emerged between Japan, Taiwan, Australia, Czechia, Lithuania, and several other countries. In particular, last April the European Union approved 130 million euros ($140 million) in financial aid for Lithuanian companies.
It is the best response to the CCP's own decades-long strategy of maintaining a "united front" with its allies and dividing and conquering its opponents.