China's ambassador to Canberra has confirmed his country will lift its ban on Australian timber imports, in another sign trade ties with Australia are slowly normalising.
Since 2020, Australia's $600 million annual timber trade with China has been suspended with Beijing citing quarantine risks.
Ambassador Xiao Qian told reporters in Canberra Thursday morning the import ban had now been lifted.
"Yesterday, the Chinese Customs have formally notified the Australian Minister of Agriculture that, starting from today, China will resume import of Australian timbers," he said.
"That is a conclusion [come to] after a serious study based on the materials provided by the Australian side."
He said that was related the quarantine of timbers, and they "have satisfied the conditions of the Chinese Customs".
"There are also other issues on the table," Mr Xiao said.
"The momentum is positive. Both sides agreed to sit down and talk about their differences."
The restoration of timber imports comes a month after Australia agreed to suspend its appeal to the World Trade Organization over Chinese government tariffs on Australian barley.
That agreement came just before the international body was due to hand down a finding over the dispute.
While Mr Xiao maintained that China's ban was a purely regulatory measure, Australian officials say it was clearly part of a broader campaign of economic punishment orchestrated by Beijing in 2020 when the relationship was mired in acrimony.
The ambassador also linked trade blocks to the broader political relationship during his press conference, saying that "as we improve our relationship the people in China have more and more favourable attitudes towards Australia, and equally to Australian products".
Timber industry reaction
Australian Forest Products Association (AFPA) chief executive Joel Fitzgibbon said the industry was pleased by the announcement.
"When the ban came into effect more than two years ago it caused a great deal of upheaval and uncertainty for many timber exporters and the broader forest sector, and this resolution is welcomed," Mr Fitzgibbon said.
"AFPA and log exporters have worked closely with the Albanese government, especially Trade Minister Don Farrell, and the former Coalition government on this issue, and we thank them for their efforts helping to resolve the quarantine issues that China faced importing logs from Australia."
Chair of the Tasmanian Forest Products Association, Bryan Hayes, said the ambassador's announcement sounded like a positive development "at first blush".
"I guess we'll wait to see the detail because, you know, it's one thing to hear a political announcement, it's another to see what actually transpires on the ground in a commercial sense," Mr Hayes said.
Mr Hayes was the chief executive of log exporter Forico at the time of the trade ban and he said 100 people lost their jobs.
While some sawn timber was still able to get to Chinese markets, whole round log exports were banned.
"I would hope that those jobs come back and the people are able to resume, but people are a little bit gun shy — there's a few battle scars from that sudden announcement [in 2020] and there was a huge disruption to businesses and people's lives," he said.
Mr Hayes added it would be expensive for some companies to re-engage with China and take a risk to set up the logistics and supply chains again.
"I know a number of them have looked for and found alternative markets and even onshore processing, because, ideally, we'd like to be doing more onshore processing and manufacturing here in Australia rather than exporting raw materials across to value add somewhere else," he said.
Karen Stephens, president of Timber Towns Victoria, which represents local government and the forestry sector, said there would be "lots of celebrations tonight".
However, she said there would also be some caution.
"The timber industry was reliant on the huge contracts with China to supply timber, but the import ban did make the [industry] rethink," she said.
"So they have found new markets. So it could be a very interesting playing field now for China," she said.
However, she added that for Victoria's "green triangle" forest region, the resumption of exports was potentially worth billions of dollars.
A 'great outcome'
Last week, Trade Minister Don Farrell made a two-day trip to China, where he and his Chinese counterpart, Commerce Minister Wang Wentao, agreed to step up dialogue on a long-running trade dispute between the two nations.
Mr Farrell returned from that trip without securing a major breakthrough, but both sides agreed to continue discussions around thawing the diplomatic rift.
In a statement after Mr Xiao's announcement on Thursday, Mr Farrell said it was a "great outcome for the Australian forestry sector".
"Australian timber was one of the outstanding trade impediments discussed with my counterpart in Beijing last week," he said.
"Any step towards resolving the trade impediments is welcome.
"We look forward the full resumption of trade for all affected products as soon as possible."
Trade tensions with China have impacted not just the Australian timber and barley industries, but also wine, lobster, coal and cattle.
Mr Farrell also raised the issue of the ongoing detention of Australian citizens Cheng Lei and Yang Hengjun during the ministerial talks, asking for them to be released as soon as possible.
Striking a positive tone
Australian officials hope the easing trade blockages will help them inject more stability into the relationship, while recognising both countries will still have deep differences across a whole range of strategic and economic issues.
Mr Xiao also struck a positive tone at the opening of the press conference, thanking Australia for joining the air and sea search for 39 crew who have gone missing after a Chinese fishing boat capsized in the middle of the Indian Ocean.
"Our Australian colleagues already dispatched three airplanes to that area since yesterday and four ships or boats in that area for search and rescue," he said.
The ambassador again heaped criticism on the Quad and Australia's plan to build nuclear submarines with the US and the UK under the AUKUS pact.
But he played down tensions between Australia and China in the Pacific, where both countries have been engaged in an intense contest for influence.
He said Chinese officials had been "briefing the Australian side" through "back channels" to reassure Canberra about its intensions in the Pacific.
"We have been notifying [Australia] in advance about our relationships with the Pacific Island countries," he said
"So I think there will be more confidence between China and Australia that the relationship between China and the Pacific Island countries will be conducive to peace and stability and prosperity."
He also said that China had been pressing Australia to start talks about Beijing's bid to join the massive Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade group, but Canberra had refused to even start discussions.
"We have been applying to enter the CPTPP for quite some time and we hope that we can first start to have a working level discussion with Australia in relevant departments on China's entry," he said.
"Now the thing is, even setting up a working group to talk about China's entry itself has not been agreed upon by the Australian side, let alone to talk about the details."
Australian officials have previously maintained that China would have to remove all the coercive trade barriers it imposed in 2020 before the government would be willing to even contemplate backing its CPTPP bid.
Editor's note May 18, 2023: The value of Australia's timber trade with China is worth $600 million, not $1.6 billion as originally reported. The story has been updated with the correct figure.
