Australia-China trade tension escalates over coal ban

The statement came as Australia’s Prime Minister Scott Morrison claimed that China’s formal ban on coal would be in breach of World Trade Organisation rules.

A Chinese state-owned newspaper Global times reported on Monday that the Chinese National Development and Reform Commission had authorised power plants to import coal with no limitations, except from Australia.

Wang, speaking at a press conference on Tuesday, claimed that he had not been aware of China reducing restrictions on other coal imports.

He added that Australia had been playing victim, “pointing and accusing finger at China, directly or by insinuation”.

“This move is meant to confound the public and we will never accept it,” he said, claiming that Australia’s response to Chinese investment projects was what was in violation of market principles and China-Australia Free Trade Agreement.

“What is worrying for us is such moves as politicising and obstructing normal trade activities, interfering in others’ internal affairs in defiance of basic norms governing international relations and even provoking confrontation,” Wang said.

Morrison said that if the coal ban were to be the practice, it would be a lose-lose situation for both countries.

China was Australia’s second biggest coal importer after Japan last year, taking nearly $14 billion worth of coal and representing 21 per cent of Australia’s coal exports.

“Coal that is sourced from other countries … have 50 per cent higher emissions that Australian coal. As a result, that would be a bad outcome for the environment,” Morrison said.

Last month, China Coal Transportation and Distribution signed a trade deal with Indonesia to buy nearly $1.5 billion worth of thermal coal from the latter next year.

Over 10 million tonnes of Indonesia’s thermal coal was estimated to arrive in China this month, according to metals and mining research and consultancy group Wood Mackenzie.

“Indonesia products are mainly low-sulphur, low-ash coal, which is needed for China’s gencos to blend with domestic high-sulphur coal in winter, normally a high-pollution period,” Wood Mackenzie senior consultant Yu Zhai said.

“Russia and Colombia will also benefit from the purchase as the two countries can meet China’s demand for high-energy coal.”