In Shanghai, Australian minister sees limits to tackling irritants in ties

By John Ruwitch and Colin Packham

SHANGHAI/SYDNEY (Reuters) – Australia’s trade minister said on Friday there was “limited scope” to resolve irritants in ties with major trading partner China, including customs delays for an Australian wine maker, during his visit to Shanghai this week.

Steve Ciobo, who arrived in China’s financial hub on Thursday, has talked up trade and cultural links in trying to put a positive spin on what some analysts say is the worst patch for ties in decades.

“We do have irritants from time to time, but you know what? We have irritants pretty much in every relationship that we have globally,” Ciobo told reporters after touring the site for an import fair China will host in November.

“So there’s nothing unique about that,” he added. “We talk through it, we work through it in a constructive way for the mutual benefit of both China and Australia.”

Ciobo’s visit has been overshadowed by delays at Chinese customs that held up product exports by Australia’s Treasury Wine Estates Ltd, the company said on Thursday, sparking fears that the cooling in diplomatic ties is now affecting trade.

China’s customs department has not responded to a facsimile request from Reuters to seek comment.

Ciobo, on a three-day visit to Shanghai arranged months ago, said on Thursday he was “mobilized” to tackle the Treasury Wine issue and a diplomatic team was on the case.

On Friday, Ciobo said he would have the opportunity to meet officials during the trip, but his schedule did not include a stop in Beijing, the capital and seat of government.

“We are in Shanghai, not Beijing, so there’s obviously limited scope for opportunities to meet with senior government officials,” he said.

Ciobo’s limited contact with officials in Shanghai has raised questions about how effective his trip will be in mending ties.

At Thursday’s gala dinner for Australian businesses, he sat next to a deputy head of Shanghai’s municipal commerce office. On his last day in China on Saturday, Ciobo and a Shanghai vice mayor are expected to attend an Australian Football League (AFL) match.

“It is clear he is not going to be getting access to the political decision makers, who are in Beijing,” said James Laurenceson, deputy director of the Australia-China Relations Institute at the University of Technology, Sydney.

“Even if he was in Beijing, I’m not sure he would be given those scheduling options anyway.”

STRAINED TIES

Two-way trade has grown to A$170 billion($128 billion)last year after Australia and China signed a trade pact in 2015, but ties have frayed since Turnbull complained late last year about undue Chinese influence in his country.

The rift took a more serious turn on Thursday, when Treasury Wine’s revelation of the delays sent its shares tumbling.

The delays have dragged a diplomatic tussle into the trade arena, analysts said, and put the spotlight on Ciobo’s visit, the first by an Australian minister in more than six months.

A source familiar with the minister’s schedule sought to downplay suggestions he was being shunned.

“The visit was organized months ago around the AFL game” and a food expo, he said.

“This issue only came to the minister’s attention less than two days ago and being in Shanghai, it will be difficult to add any additional meetings,” the source said, referring to Treasury Wines.

Turnbull, on a visit to rural Australia, said the bilateral relationship was “strong” and he looked forward to visiting China later this year.

“We have a very close relationship at every level – economic, cultural, family, social – it’s a very strong relationship,” he told reporters.

Australian Foreign Minister Julie Bishop hoped to meet her Chinese counterpart, Wang Yi, next week while in Argentina for a G20 meeting, said a source familiar with Bishop’s schedule.

But the source did not expect the wine issue to be raised.

“She doesn’t plan to raise the issue of Treasury Wine, it will be much broader than that,” the source said.

(Reporting by John Ruwitch and Colin Packham; Editing by Darren Schuettler and Clarence Fernandes)

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