Economics for Business Essay Example | Topics and Well Written Essays - 1500 words

Economics for Business - Essay Example Since China was the biggest importer of the Australian rock lobsters, this industry would lose a significant amount of its revenues in the face of such a prohibition. The Australian Fishing Authorities had also requested the National Government to negotiate these trade restrictions with the Chinese Government. This would save their business from being affected (The Telegraph, 2010). 2. The Chinese economy was the largest buyer of the rock lobster exports of Australia. When the Chinese Government prohibited the Australian lobsters from being imported into the country in November 2010, this came as shocking news to the Australian fishing community. With the exclusion of its biggest export destination, the rock lobster industry in Australia was sure to suffer huge financial losses. The fishing communities in the Victorian province, Western and Southern Australia specialized in the trading of rock lobsters and were expected to be significantly affected as a result of the Chinese ban. The Australian fishing authorities feared that the country’s fishing community would be compelled to sell their catch at very low prices in the market. This in turn would result in lower revenues for these indigenous people. Thus, Australia’s fishing industry was set to be badly hit by China’s import restrictions. ... This ban was expected to generate a host of impacts on the Australian economy, the Chinese markets as well as the international trading community. First of all, the Australian fishing communities were expected to be adversely affected by the Chinese prohibition. The fishing communities hailing from the Victorian province, the eastern and southern Australia specialize in the trading and exporting of rock lobsters. They would witness a sharp decline in the revenues earned from the lobster export. The price of lobsters in Australia’s domestic market was expected to fall, as the demand for lobsters to be exported would reduce. This again would affect the profits of the Australian fishing communities, who would have to sell their lobster hauls at much lower prices to the local citizens. While China had implemented a ban on the import of the Australian rock lobsters, the nation continued to import lobsters from New Zealand and South Africa. If this resulted in a decline in the total quantity of lobsters imported in the Chinese economy, this would lead to a rise in lobster prices in the Chinese markets. However, if the country kept its import quantity the same as before by importing more lobsters from New Zealand and South Africa, then the internal lobster prices would not rise. Finally, there was an opportunity for New Zealand and South Africa to gain from the Chinese ban. Even after it had stopped importing Australian rock lobsters, China continued to import is seafood from New Zealand and South Africa. Both these countries could witness an increase in their lobster exports if China decided to import extra lobsters to replenish the missing imports from Australia. This would result in increased export revenues for both these nations (Herald Sun, 2010). The