Australia seeks clarity from China over reported halt on coal imports
The Australian government is seeking assurances from China over the impact of reported curbs of coal imports, while calling on Beijing to end the freeze on ministerial talks as concerns grow about widening trade tensions.
The Greens seized on the reported moves as evidence Australia needed a “Plan B” and a transition plan for when the rest of the world no longer wanted the country’s coal.
The uncertainty was fuelled by reports by two industry newswire services that China’s customs authorities had told several state-owned steelmakers and power plants to stop importing Australian thermal and coking coal.
Scott Morrison said the government was investigating the reports, but it was “important not to get ahead of ourselves here” because it was “not uncommon” for China to impose domestic quotas to support local coal production and jobs.
“That is not uncommon to see that and I can only assume, based on our relationship and based on the discussions we have with the Chinese government, that that is just part of their normal process,” the prime minister said in Brisbane on Tuesday.
But the Labor leader, Anthony Albanese, said the reports were “a huge concern” and he accused the Morrison government of failing to make efforts “to have a positive, constructive relationship” with China to the mutual benefit of both countries.
He said that while Australia should pursue trade diversification, China remained an economically important export market and it was worrying that ministers were unable to speak directly with their counterparts.
“We are a democracy, they’re not, but that doesn’t mean that you can’t have an economic relationship with China,” Albanese said in Wollongong. “It’s too important for us to ignore that.”
There has not yet been any official confirmation of the move – first reported by S&P Global Platts and Argus Media – but Australia’s trade minister, Simon Birmingham, said the government had made approaches to China “through diplomatic channels overnight”.
He said on Tuesday the government took the reports seriously enough to “try to seek some assurances from Chinese authorities that they are honouring the terms of the ChinaAustralia free trade agreement and their [World Trade Organisation] obligations”.
Birmingham told Sky News the government was “working with Australian industry, as always, to try to save Australian jobs”.
He cautioned that the reports might relate to temporary moves connected to import quotas, saying it was “not the first time in recent years that we’ve seen some possible disruption to the timing and sequencing of exports of coal, in particular into China”.
“And what we have seen is almost a pattern in relation to some informal quota systems or the like, seemingly operating within the Chinese system,” Birmingham told ABC Radio National.
“But we’re monitoring closely to see whether there’s anything more to it on this occasion.”
The leader of the Greens, Adam Bandt, said it was wrong for the major parties to say coal would be in the system for decades “because at some point soon the rest of the world won’t want it”.
“Liberal and Labor have no ‘Plan
B’ for when the rest of the world tells us to stop digging coal,” Bandt said. “This news reinforces the need for the Greens’ plan to diversify our economy and look after coal communities as we transition.”
China has taken a range of actions against Australian exporters this year, including imposing prohibitive tariffs on barley, suspending imports from five red meat processing plants and launching two trade investigations into wine.
By extending its trade actions to coal and iron ore, China could intensify economic pressure on Australia, which has insisted it will not be deterred from standing up for its values.
Government figures show Australia exported $7.3bn of coal to China in the first six months of this year – up 8% compared with the same period last year. The value of Australian exports of iron ore and concentrates to China rose 16% to $43bn.
Last week’s federal budget said coal export volumes were expected to be subdued in the near term due to lower global demand. But it said overall mining exports were expected to grow by 0.5% in 2020-21 and 4% in 2021-22, “supported by robust demand for iron ore from China, and a gradual recovery in other key export partners”.
“Metallurgical and thermal coal prices have remained subdued alongside lower global demand and uncertainty over China’s import policies,” the budget papers said.
Birmingham said on Tuesday the Australian government had reaffirmed its desire to have ministerial-level talks with the Chinese government and “our door remains wide open to do that”.
He said Australia had also contacted the Chinese embassy in Canberra and stressed its desire to engage in dialogue after Madame Fu Ying, China’s former ambassador to Australia and an influential figure in Beijing, made conciliatory comments last week.
Fu told the Australian Financial Review both countries needed to “show their sincerity and courage to get out of the current dilemma” and increase contact and mutual understanding “instead of resorting to confrontation and abusing language based on assumptions and hypothesis”.
The Australian government infuriated China with its early and vocal calls for a global independent investigation into the origin and early handling of the coronavirus – a step Beijing took as being aimed against it.
Guardian Australia approached the Chinese embassy on Monday seeking confirmation of the reported moves against Australian coal but is yet to receive a response.