While Australia's trade disputes with China are being held up as a warning to other countries, a new analysis believes it is wrong to suggest that Australian businesses were naive putting all their eggs in one basket.
Despite having a free trade agreement with the nation's number one trading partner, China has targeted a number of Australian exported products over a variety of grievances, including on wine, seafood, barley and coal.
But the Australia-China Relations Institute at the University of Technology Sydney says the size of Australia's exposure to China is not unusual.
"Medium-sized economies like Australia that require openness to prosper will inevitably develop significant aggregate exposures to much bigger ones," the institute says.
In 2020, just two economies - China and the US - accounted for a combined 34.2 per cent share of the global economy.
While 41 per cent of Australia's goods exports went to China in 2020, the institute says this heightened exposure was only temporary due to historically high iron ore prices.
"Further, it has not come with greater risk because what it demonstrates is (China's) ongoing reliance on Australia to supply big-ticket items like this essential, steel-making ingredient," it says.
The annual value of goods to China is 3.8 times greater than those to Japan, Australia's second largest trading partner.
Excluding iron ore, goods exports to China remain 20 per cent higher than those to Japan.
In a speech earlier this week, federal Treasurer Josh Frydenberg said many of the firms and industries targeted by China's trade restrictions have also been successful in redirecting goods to other export destinations.
China's trade actions have seen total exports to China fall by around $5.4 billion over the year to the June quarter.
But over the same period, exports of those goods to the rest of the world have increased by $4.4 billion.
The institute says its findings show that Australian businesses with a high exposure to China were neither naive nor irresponsible.
"In fact, the findings show that many business owners were able to secure premium prices in (China) for an extended period, and when this opportunity closed, they quickly and successfully pivoted to alternative markets," it said.
It also believes that the costs to exports from the political breakdown between Canberra and Beijing is not the only, or biggest, problem.
"Australia's strategic, security and other national interest objectives are difficult to achieve in the absence of a productive, working relationship with the region's dominant power," it says.