2LT National News

SYDNEY, Australia: Australian businesses are feeling optimistic about their prospects in China despite escalating global trade tensions, according to Reserve Bank of Australia Deputy Governor Andrew Hauser.

In a speech delivered in Sydney this week, Hauser said his recent visit to China revealed a surprisingly upbeat sentiment among Australian exporters. Many believe that the recent U.S. tariff hikes on Chinese goods may give them a competitive edge in Chinese markets.

Hauser’s trip in early April came just after Washington announced sweeping new levies on Chinese imports, a move that sent shockwaves through global trade channels. However, during meetings with Chinese institutions and Australian businesses operating there, Hauser encountered a confident tone.

“There was a striking belief that China entered this trade dispute from a position of strength,” he said, adding that few expected the Chinese yuan to be devalued in response.

Exporters, particularly those in steel and iron ore — Australia’s most significant exports to China — appeared largely unshaken. Hauser noted that they saw little threat to the cost or scale advantages of Australian ore in the short term.

“The recovery in sentiment in early 2025 and confidence that the authorities would ‘do what it takes’ to sustain the economy was part of it,” he said. “But there was also a sense that recent developments in trade policy could enhance their competitive position in Chinese markets.”

Hauser acknowledged that redirected Chinese goods, initially intended for the U.S., could intensify competition for Australian companies at home and abroad. However, he noted that the overlap in products between the two countries remains limited.

The Reserve Bank has assessed that recent global trade shifts are likely to have a disinflationary effect on Australia overall — a view that factored into its decision to lower interest rates by 25 basis points earlier this week.