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China Seemingly Picking off Australian Industries One by One 

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Among the latest to feel the wrath of China from the trade tensions are the Australian cotton growers. 

Chinese spinning mills have been discouraged by authorities from using Australian cotton as reported by producers. 

It is the second industry this week to raise an alarm about the stained relationship, with customs authorities allegedly telling companies to stop importing Australian coal. 

Trade Minister Simon Birmingham is demanding Beijing rule out any “discriminatory actions” against cotton producers. 

“Impeding the ability of producers to compete on a level playing field could constitute a potential breach of China’s international undertakings, which would be taken very seriously by Australia,” Senator Birmingham said. 

“We are aware of concerns about possible changes in export conditions for our cotton exporters and, in consultation with the cotton industry, are seeking to clarify the situation.” 

Senator Birmingham said Australian cotton exporters have worked hard to win contracts and establish themselves as reliable suppliers of high-quality cotton in the Chinese market. 

Chinese millers have quotas for Australian cotton imports but have been warned that they might not get their quota next year if they continue to make purchases. 

Cotton Australian and Australian Cotton Shippers Association confirmed in a joint statement on Friday confirmed that the National Development Reform Commission in China had been discouraging the use of Australian cotton. 

“Our industry’s relationship with China is of importance to us and is a relationship we have long valued and respected,” is stated. 

“To now learn of these changes for Australian cotton exports to China is disappointing, particularly after we have enjoyed such a mutually beneficial relationship with the country over many years.” 

“Despite these changes to our industry’s export conditions, we know Australian cotton will find a home in the international market.” 

Cotton Australian chief executive Adam Kay told ABC RN that most of the Chinese mills it had spoken to had been affected. 

“It is concerning for us because something like 65 percent of our Australian crop does go to China at the moment,” he said. 

“This afternoon I will be meeting with our embassy in China, some of the trade officials there and try and get to the bottom of it.” 

Treasurer Josh Frydenberg said the issues with China and the trade relationship were “challenging” but would continue. 

“But it has also been very important to both of our countries,” he said, adding it would continue. 

“When it comes to our two-way trade worth more than $200 billion a year with China its important to remember that it is mutually beneficial.” 

“We supply more than 60 percent of China’s iron ore which is underpinning their economic growth.” 

But opposition leader Anthony Albanese said the government had not managed the relationship. 

“You have a trade minister who can’t pick up the phone to their counterpart in Beijing,” Mr. Albanese said. 



In the daily charts of AUD/USD, the pair gained against the dollar early morning Monday on Sydney Session.  

The AUD/USD pair gained 0.36% to 0.7106. 

Although AUD gained against the dollar, it is too early to say that any gains can be locked in til the end of the day as many factors still holds back the Aussie dollar such as the ongoing trade tensions between China and Australia and the ongoing economic recession that the virus has brought to the country. 

As what we can see in the support and resistance levels on the chart, the pair is still bouncing between the area of support and resistance and it may once again touch the support at 0.6995 this week. If there are any stimulus this week, it may bounce back from this support level, otherwise it may continue to thread lower past the support level and further strengthening the position of Aussie bears. 


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