China exports buoy Australia trade surplus

Australia recorded a $9 billion goods trade surplus in December, up from $7.4 billion in November.
Australia recorded a $9 billion goods trade surplus in December, up from $7.4 billion in November.

The diplomatic row between Australian and China rolls on, but new figures show trade between the two countries has not been totally throttled by the war of words.

Australia enjoyed its fourth-highest goods trade surplus on record in December, with exports jumping 16 per cent in the month.

Australian Bureau of Statistics head of international statistics Katie Hutt said the strong surplus was heavily influenced by trade with China.

Preliminary international trade figures released by the ABS on Monday show Australia recorded a $9 billion goods trade surplus in December, up from $7.4 billion in November.

"Exports of metalliferous ores and cereals are the strongest in history, resulting in the fourth highest goods trade surplus on record," Ms Hutt said.

While imports from China - Australia's number one trading partner - fell by $641 million or seven per cent, exports increased by $2.2 billion or 21 per cent.

Overall, the $4.9 billion increase in total exports recorded for the month was largely driven by metalliferous ore shipments.

Just over 80 per cent of this was in iron ore exports, which was up $2.2 billion or 21 per cent.

Hard coking coal exports rose 38 per cent in December. While exports to China have diminished since mid-2020, increased exports to India, Japan and South Korea have offset some of the fall.

Meanwhile, total imports declined $2.5 billion in the month or nine per cent, although vehicle imports continued a rising trend seen in the second half of 2020.

"We continue to see a rise in road-vehicle imports with December recording the highest monthly value, surpassing the previous record set in June 2018," Ms Hutt said.

The final trade figures for the month, which will also include services trade, will be released on February 4.

Prime Minister Scott Morrison said on Monday he is ready and willing to meet with Chinese President Xi Jinping, but only if there are no preconditions to holding the talks.

The prime minister is refusing to cede any ground over Chinese grievances with Australia in return for restarting diplomatic dialogue.

Closer to home, there was a worry for households as petrol prices rose by a record 14.4 cents a litre last week to 134 cents a litre, according to the Australian Institute of Petroleum.

"There hasn't been a bigger jump in 17 years of records," Commonwealth Securities chief economist Craig James said.

"The spike in petrol prices has potential to dampen consumer sentiment and spending at a time when people need to be spending to boost economic activity."

Filling up the car at the bowser is considered the single biggest weekly purchase for most families.

Australian Associated Press