China’s globally-focused state media outlet has suggested Beijing could cut Australian imports by billions of dollars and cool diplomatic relations between the countries for an extended period.

In an extensive editorial on Chinese-Australian relations published today, the Global Times — known for its belligerent editorials — says that despite Australia indicating it wants relations to improve, “it is necessary for China to leave Australia hanging for a while, instead of being too quick to bury the hatchet whenever Canberra tries to put a smile on its face.”

Any move to limit Australian imports would impact a wide variety of ASX stocks in segments from coking coal to battery metals to infant formula.

ASX-listed companies exporting infant formula and other dairy products to China have enjoyed strong gains in recent times on the back of demand for high quality Australian produce.

Dairy stocks that could be affected include small caps such as Longreach OilJatEnergy, Bioxyne, and Aus Dairy Farms along with more established players such as a2 Milk, Wattle Health, Bubs and Bellamy’s.

Vitamin maker Star Combo Pharma made a very strong ASX debut last week on the back of a plan to export vitamins to China.

Bejing this week sent its strongest signals yet on the deteriorating relations between the countries amid increasing concern about Chinese influence in Australia from media and politicians over recent years.

The editorial said it was time to “make Australia pay for its arrogant attitudes it has revealed toward China over the past two years”.

The article canvasses options for trade reduction:

Metal ore is Australia’s major export to China. As long as China is in need of the metal exports, and a replacement remains difficult to find, they will continue to import them. But when it comes to wine and beef, China can easily import those items from the US, replacing Australia.

The scope of import reductions could be limited. Last year, Australia exported $76.45 billion in goods to China. Lowering Aussie exports by $6.45 billion would send cold chills up and down the spine of Australia. Of course, it would be an even greater shock if the import reductions totaled $10 billion.

China has been very friendly toward Australia, but their arrogant attitudes in return over the past two years have become a virtual example of what it means to “bite the hand that feeds.”

Yesterday Beijing has made it clear that it now has a dim view of its relations with Australia, with a spokesman for foreign minister Wang Yi saying that Australia “must break away from its traditional thinking, take off its tinted glasses to look at China’s development from a more positive angle”.

This view was communicated in a meeting with Australia’s foreign minister Julie Bishop on the fringes of the G20 meeting in Argentina this week.

You can read the full editorial here.


This article first appeared on Business Insider Australia, Australia’s most popular business news website. Read the original article. Follow Business Insider on Facebook or Twitter.