China tones down its pressure on Australia

<p>Kia ora,</p><p>Welcome to Monday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the international edition from Interest.co.nz.</p><p>And today we lead with news necessity is moderating China's "wolf warrior" diplomacy - even though the original 'wolf warrior' is back as the Chinese foreign minister.</p><p>Late last week China <a href="http://www.mofcom.gov.cn/article/zwgk/gkzcfb/202308/20230803425622.shtml" target="_blank"><strong>announced</strong></a> that they will drop its tariffs on Australian barley imports that have been in place for three years. In response, Australia said it will suspend its case at the WTO. It was widely expected that China would lose the case. China had already lifted its block on importing Australian coal. But don't forget China still has a blockade on Australian wine imports. Until that is lifted, the Australian prime minister won't visit Beijing, a stance that is said to annoy the Chinese leadership.</p><p>Staying in Australia, their competition regulator has knocked back ANZ's AU$4.9 bln takeover of Suncorp Bank. It is not a complete surprise, with others working to merge Suncorp Bank with Bendigo Bank. The ACCC is also promoting that 'solution'. But the problem with the alternative is that would be two weak institutions combining, and it wouldn't necessarily result in any strength improvement. However, the ACCC <a href="https://www.accc.gov.au/media-release/accc-denies-authorisation-for-anz-to-acquire-suncorp-bank" target="_blank"><strong>said</strong></a> “We are not satisfied that the acquisition [by ANZ] is not likely to substantially lessen competition in the supply of home loans nationally, small to medium enterprise banking in Queensland, and agribusiness banking in Queensland. ... Second-tier banks such as Suncorp Bank are important competitors against the major banks, especially because barriers to new entry at scale into banking are very high”. ANZ <a href="https://media.anz.com/posts