China turns up the heat on trade war, bans Australian coal

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 China turns up the heat on trade war, bans Australian coal

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  • The Global Times, China’s state-owned tabloid, has reported on Australian coal being banned from the Chinese borders.
  • As the article has still not been confirmed by the authorities, Trade Minister Simon Birmingham has asked China to sack the information.
  • After barley, lobster, timber, and wine products have been punished, the A$14 billion coal industry joins the show, raising anxiety in Australian miners.

Chinese authorities are thought to have confirmed a formal ban on A$14 billion coal imports from Australia on Monday night. Since then, the Australian government has been looking for an explanation, as there were no official warnings from China prior to the decision.

With this news, a dispute between formerly well-operating countries has intensified to a further extent, bringing uncertainty to the Australian multibillion-dollar coal industry.

Chinese tabloid magazine, the Global Times, has reported that the authorities have allowed coal imports without further inspections from all nations “except Australia”, fuelling suspicions about the formal ban.

Some experts did not take the sensational news seriously. However, the Morrison government pointed out that such information is often influenced by the Chinese leadership.

The recent escalations in China-Australia trade war have jeopardised Aussie exports worth A$20. Barley, lobster, wine, and timber bans have already been enforced

DO READ: Are We Prepared for a Trade War with China?

How did the import difficulties start?

Even though coal prohibition came into effect as a surprise, the Australian mining industry had anticipated the situation.

The first whiff of it came in October when China announced a likely ban on Australian coal imports. Several delivering wagons have been stranded at Chinese borders ever since.

October issues have caused significant anxiety among Australian miners, as the country depends significantly on the Chinese partnership.

In November, China alluded to the environmental impact of coal and prohibited dozens of energy-containing tanks on the soil.

Image Source: Shutterstock

ALSO READ: Australian lobster industry in troubled waters after Chinese restrictions

What is the Global Times saying?

In the controversial article, the Global Times indirectly reported about the punishment that the Chinese government will continue to inflict on Australian imports.

Wang Yongzhong, Director of the Institute of Energy and Economy at one of the Chinese universities, was quoted as saying that Australian products had no place in the Chinese market.

According to Mr Yongzhung, Indonesia, Mongolia, and Russia seemed to be benefiting from the verdict, as the relationship between Australia and China have been worsening for months.

RELATED: Indonesia Coal Production Falls Short of Target at 514.2 Million tonnes

China is also planning to reduce 100 million tons of coal intake by 2030. The nation’s ultimate goal is to achieve carbon-neutral status by 2060. 

What could be the impact on the Australian economy?

As mentioned earlier, the Australian coal industry brings A$14 billion from China to the country’s GDP.

As the tabloid’s report has still not been officially confirmed by the Chinese authorities, Trade Minister Simon Birmingham has urged China to dismiss the news. If the officials confirm the story as accurate, the coal deal would be against the initial trade contract.

Glencore, the leading coal manufacturer in Australia, froze all exports to China earlier in December.

The quarrel over coal has led to a decrease in Aussie coal prices to US$63 a tonne. However, the Global Times has encouraged power stations to not pay more than US$97.8 per tonne to other nations.

Coal is the third-largest energy sector that China has tried to ban from Australia, following iron ore and natural gas.


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