Friday, March 05, 2021

Greg Hunt: Italy’s AstraZeneca ban ‘won’t affect Australia'

Italy has launched a COVID vaccine war, refusing to release an Australian shipment of 250,000 doses of the Oxford AstraZeneca jab. But the Morrison Government insists it won’t affect the rollout of the coronavirus vaccine in Australia.

A spokesman for Health Minister Greg Hunt said: “This is one shipment from one country”. “The AstraZeneca Roll out begins today in Murray Bridge South Australia,” Hunt’s spokesman said.

“The first International shipment already arrived which takes us through to the commencement of domestic CSL supplies. “This shipment was not factored into our distribution plan for coming weeks.”

CSL’s Australian manufacturing would deliver one million doses per week by the end of the month, Mr Hunt’s office said.

Meantime, the drastic move from Italy came as it and most of Europe is still struggling with a major shortage of vaccines following a disastrous procurement process.

The European Union voted to buy all vaccines as a bloc, but bet heavily on French vaccines that failed.

Italy has vaccinated just under 5 million of its 60 million people, but has been struggling with delays in supplies from AstraZeneca following problems at its Belgian plant.

Now, Italian officials have taken the drastic move of banning supplies leaving Europe.

The London Financial Times reported on Thursday afternoon local time that Italy had become the first country to ban exports of vaccines under new rules that were introduced to hoard medical supplies.

The European Commission had the power to veto Italy’s ban, but Brussels officials allowed the shipment to be stopped.

Ursula von der Leyen, the boss of the European Union’s vaccine rollout, had warned last week that EU countries would block exports if AstraZeneca did not increase supplies. “If companies don’t fulfil their contractual obligations, yet do export, the commission may decide to make a move under the export regimen,” she said.

The vaccine roll out in Europe has been an embarrassment, with Britain streets ahead in its vaccination program with more than 20 million doses delivered.

British politicians have claimed that they were able to supercharge the vaccine program because they were free of EU rules after Brexit.


In One Australian State, Trade With China Is Still Booming

Australia’s minerals trade has been divided almost clean in half by the country’s trade spat with China.

Ships carrying Australian coal stranded off the coast of China have become an apt symbol of the recent deterioration in relations between the two countries. The spat, which began when Australia called for an independent investigation into the origins of the COVID-19 pandemic, has resulted in an unofficial embargo on Australian coal, tariffs of 200 percent on Australian wine, and trade in barley grinding to a near-halt.

Even before the dispute began, jobs at Australian coal mines in Queensland and New South Wales, which cumulatively produce 86 percent of Australia’s coal, were already under threat due to depressed demand. With the added pressure of China’s restrictions, revenues have tumbled even further.

But not everywhere in Australia has lost out. This month, officials in the state of Western Australia – where 98 percent of Australia’s iron ore is mined – announced a A$10.7 billion ($8.4 billion) windfall in royalties for the state government, predominantly driven by a rise in Chinese demand for iron ore. As a result, Australia’s minerals trade has been divided almost clean in half. Coal, predominantly mined in Australia’s eastern states has suffered due to Chinese restrictions; meanwhile iron, mined in the west, has boomed due to the same country’s demand.

Western Australia – home to only 2.7 million people – produced 37 percent of the world’s iron ore in 2019, mined mainly in the state’s northwestern Pilbara region. In the same year, the iron ore industry accounted for 20 percent of the state’s gross state product, and 53 percent of the value of Western Australia’s merchandise exports.

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China imports roughly two-thirds of its iron ore from the state, more than three times its second importer, Brazil. Iron ore underpins the state’s large trade surplus with China which, according to government statistics, reached A$92.6 billion in the 2019-2020 financial year.

With the onset of the pandemic, concern spread that the state’s trade in iron ore would be severely impacted. However, Philip Kirchlechner, director at Iron Ore Research, a mining consultancy, said, “The expected fall from China never happened.”

While some cities in China experienced power shortages, a product of its stubborn resistance to imports of Australian coal, China’s demand for iron ore rose by 7 percent, to over 1.4 billion tonnes. This rise in demand spurred another year of over 1 billion tonnes of Chinese steel production, and was enough to offset a fall in demand from Japan, South Korea, and Taiwan, which decreased at an average of 13 percent across the three countries.

That rise in demand meant that, despite geopolitical tensions with China, the three largest exporters of iron ore from Western Australia – Rio Tinto, BHP, and Fortescue – all recorded positive results for 2020.

Citing “buoyant demand” from China, Rio Tinto, the largest iron exporter in the state, saw gross sales in 2020 rise 14 percent on the previous year to $27.5 billion. According to half-year results to December 31, 2020, BHP saw profit from operations of $9.8 billion, up 17 percent on the previous year, driven by “higher iron ore and copper prices.”

Fortescue, the state’s third-largest exporter of iron ore, also saw record shipments – 90.7 million tonnes – in the half year to December 31, 2020. Fortescue’s CEO, Elizabeth Gaines, told The Diplomat that “Fortescue’s success, and that of the Australian economy, has been built on the great powerhouse that is China.”

“Throughout the disruption as a result of the COVID-19 pandemic, Fortescue has remained a reliable and secure supplier of iron ore to support the strong, ongoing demand from our Chinese customers,” she added.

Despite this rosy picture, the reciprocal nature of China’s dependency on Western Australia for iron ore has long been a source of disquiet within the state’s government and business community. During the 2019-2020 financial year, 82 percent of Western Australia’s iron ore was exported to China, at a value of A$83.7 billion. The next largest export destination was Japan, which took just 7 percent.

Simmering tensions between Australia and China have only exacerbated concerns China could seek its iron elsewhere. State government officials could not immediately respond to a request for comment, as parliament is currently dissolved ahead of state elections in mid-March. However, in comments made to the Australian Broadcasting Corporation in December, Mark McGowan, the state premier, said that he was “concerned” the state’s iron ore could become the next target of Chinese tariffs.

The potential choke point has not escaped the attention of the state’s resource companies. Geopolitical uncertainties were a central facet of Rio Tinto’s recently published annual report, which affirmed that, “balancing the relationships we have with our host country government… alongside those we have with China as a key customer and supplier, market, technology partner and shareholder, is one of our top strategic priorities.”

“We monitor these trends closely, and in particular the evolution of the relationship between Australia and China.”

Australian iron exports to China are chiefly used for steel production, which, as Philip Kirchlechner of Iron Ore Research explained, “enabled China to build its infrastructure at a low cost.” Yet in the next week China is set to outline its 14th Five-Year Plan, a central component of which is expected to be a push to shift China from being an infrastructure-led economy to one driven by consumer demand.

Despite this anticipated shift, Kirchlechner warns against concluding this will necessarily lead to a fall in China’s demand for iron ore. “Even though this should be the year of the consumer, they [China] will continue to need steel: the question is how much,” he said.

At this level of mutual dependency, it seems unlikely either side would pursue measures that could jeopardize the current trading relationship. Still, Reuters reported last November that China’s Baowu Group, the country’s largest steel producer, had plans to invest in an iron ore mine in Guinea. Australia finds itself in a less flexible position. China is by far the world’s largest importer of iron ore, a scenario that would remain unchanged by a small fall in demand.

The incoming Western Australian government has the more pleasant problem of deciding what to do with the windfall cash. And while the broader problem hums in the background, examples from the badly-hit coal industries in eastern states, which have already begun to re-align trade flows, may be a source of reassurance.

But that may be some time off. For now, Kirchlechner reiterated, “The reality is both sides need each other.”


Victorian parliamentary committee set to announce decision on banning Nazi symbols

I bet they won’t ban the hammer and sickle, Chairman Mao’s face, or the many other symbols and badges of social oppression and murder.

This morning, a Victorian parliamentary committee will announce its decision on whether the swastika and other Nazi symbols should be banned from public display.

Dvir Abramovich, who chairs the non-government Anti-Defamation Commission, hopes the committee members will "take the high moral ground and say enough is enough".

"I don't think the day is far away when we will see neo-Nazis marching in the streets of Melbourne's CBD with neo-Nazi flags. And if we don't change the laws, nothing will stop them," he said.

There was certainly nothing to stop a group of around 40 neo-Nazis from marching through Halls Gap in January, wearing Nazi symbols and throwing Nazi salutes.

Victorian Premier Daniel Andrews called it a "deficiency in the law" in 2019, when the state was similarly powerless to stop a planned neo-Nazi music festival in Melbourne.

Soon afterward, the Victorian Parliament's Legal and Social Issues Committee began inquiring into whether Victoria's racial vilification laws were fit for purpose.

The Premier gave a strong hint he would be receptive to a recommendation to ban Nazi symbols from public display.

"There's no place for those views, there's no place for those symbols, there's no place for those attitude and conduct in a modern Victoria," he said.

Numerous submissions to the inquiry have argued they are not — saying the bar is too high to bring charges, and that the penalties for convictions are too low.

But Dr Abramovich said more legal tools were needed to put a stop to the growing threat of emboldened far right groups.


Leaders aren't talking and trade tensions remain, but Chinese students haven't abandoned Australia … yet

Chinese people in Australia have lodged more student visa applications in the month of January this year than in January during any previous year.

While it's a positive sign for the local education industry, the volume is far from making up the shortfall in applications being lodged from overseas.

And experts say it's too soon to assess whether diplomatic and cultural tensions are affecting the Chinese appetite for Australian education.

According to the Department of Home Affairs, 1,978 Chinese nationals based in Australia lodged a student visa application in January. The previous January, 1,652 were lodged.

Henry Sherrell, fellow at The Grattan Institute, believes the increase is a reflection of the demand from Chinese migrants currently in Australia seeking to extend their say.

"If I were in Australia right now on some form of temporary visa, and I had the capacity to get a student visa from within Australia, I'd do the same," he said.

But the modest increase is dwarfed by the reduction in visas lodged by Chinese students offshore since the pandemic began, as border closures limit the volume of new student arrivals.

Diplomatic tensions between China and Australia have been heated for more than a year, with Australian ministers being unable to speak to their Chinese counterparts.

Chinese Ambassador to Australia, Cheng Jingye, told the Financial Review in April, "the Chinese public is frustrated, dismayed and disappointed with what Australia is doing now".

"I think in the long term... if the mood is going from bad to worse, people would think 'Why should we go to such a country that is not so friendly to China? The tourists may have second thoughts," he said.

"The parents of the students would also think whether this place which they found is not so friendly, even hostile, whether this is the best place to send their kids here."

It was a threat striking at two of Australia's vital sectors.

One in 20 Australian workers are in tourism. And only iron, coal and gas are worth more in exports to Australia than education.

The divisions appear to be having a social impact too. Chinese Australians are reporting a shift in sentiment against them, according to a recent Lowy Institute poll.

International student focus

The latest figures from the Department of Education suggest that while international student enrolments have slid during the pandemic, the share of Chinese students has held firm.

There were 127,000 Chinese students enrolled in Australian universities in November 2019 — 38 per cent of the entire international cohort of 335,00.

The total for 2020 has dropped to 299,000, but the share from Chinese students has increased slightly to 39 per cent — more than 116,000.

The Department says there are grounds to be confident these numbers will hold up in 2021.

Universities Australia chief executive Catriona Jackson has witnessed enrolments fall across the sector, but China's drop is in step with the rest of the world.

"Up until the end of November 2020, international student numbers from China declined at a similar rate to those from the rest of the world."

The university census date later this month looms as an important marker, but Mr Sherrell warned it will be some time before we know whether it's the pandemic or diplomatic tensions driving migration trends.

"Broader social and economic changes due to the pandemic will mean it is almost impossible to spot and isolate the effects of diplomatic tension, with so many different things happening at the same time."

Ms Jackson said Australia remains a "very attractive destination for international students from China and around the world".

"We stand ready to welcome international students back to our campuses when it is safe to do so."




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