China has targeted Australian beef, barley, coal, copper, cotton, seafood, sugar, timber and wine.
Before the sanctions, these exports were worth about $25 billion in 2019, or 1.3 per cent of gross domestic product.
As of the end of January, the value of these exports to China had dropped to about $5 billion a year, the analysis by Lowy Institute chief economist Roland Rajah shows.
But most exporters — barring wine and beef producers — appear to have managed to shift their goods to markets other than China.
“Looking at exports of barley, copper, cotton, seafood and timber, sales of these products to other markets rose sharply, but only after China's sanctions intensified in late 2020 — with the stark shift signalling this was indeed mostly a result of trade diversion,” Mr Rajah said.
“However, Australia's wine industry has struggled to make up for the loss of the premium China market.
“Total beef exports are also down, though this is more a reflection of supply-side issues after years of drought.”
The effect of China's trade sanctions on Australia's exports "has been completely swamped by the booming iron ore trade — which China hasn't been game enough to touch".
“Hence, the total economic impact of China's trade coercion against Australia seems to have been quite limited thus far,” Mr Rajah said.
He said while China had targeted products for which it had alternative suppliers, there were also alternative buyers for Australian goods.
“And this shuffling of global trade is precisely the reason the damage inflicted on Australia has been limited.”
The research published on Thursday comes after the Federal Government urged exporters to look for new Asian markets to combat the economic fallout of coronavirus and strained relations with China.
Trade Minister Dan Tehan on Wednesday released the final report of the Asia Taskforce — a joint project between the Asia Society and Business Council of Australia.
It provides a blueprint for Australia to compete more successfully in the region.
Mr Tehan said business and government needed to work together in order to keep trade with Asia moving.
