SYDNEY - Australia is trying to clarify reports of a Chinese ban on its coal imports. Industry sources have said Beijing told energy providers and steel firms to stop buying Australian coal. Trade tensions between the Asia-Pacific partners have deteriorated in recent years.
Coal is one of the major Australian commodity exports to China, behind iron ore and liquefied natural gas. So, any disruption to this multi-billion trade would hurt. State-owned energy providers and steel mills in China have reportedly been told not to buy Australian coal. Australian officials believe it could be temporary and part of informal quotas in China, or an attempt to restrict imports to protect China’s domestic coal mining industry.
However, analysts have speculated that the reported ban on Australian coal could be part of an emerging trade war.
Earlier this year, China was infuriated when Canberra called for a global investigation into COVID-19, which was first detected in the Chinese city of Wuhan. Relations have also soured over allegations of Chinese interference in Australia’s domestic politics, cyber-espionage and the detention of Australian citizens in China. Beijing has accused Australia of being “anti-China.”
Australian Trade Minister Simon Birmingham says he has not confirmed that coal exports to China are being disrupted.
“We have also been working to seek a response from Chinese authorities in relation to the accusations that have been made publicly. But we take the reports seriously enough to certainly to try to seek some assurances from Chinese authorities that they are honoring the terms of the China-Australia free trade agreement,” Birmingham said.
Earlier this year, Beijing effectively banned imports of Australian barley, placed restrictions on meat, and discouraged students and others from traveling to Australia. In August, China said it had launched an anti-dumping investigation into Australian wine imports.
China is Australia’s biggest trading partner. Australia owes its recent prosperity in large part to Chinese demand for iron ore and other resources. Given this economic reality, standing up to Beijing isn’t easy.