Simon Birmingham, Australian Trade Minister, stated Tuesday he was “deeply troubled” by new reports in Chinese state media that China’s top financial planner successfully banned certain coal imports from Australia. China has already forcibly reduced tariffs on a variety of Australian products. Except from Australia, NDRC China has granted power plants authorization to buy coal from overseas without any restrictions.
China’s Foreign Affairs Ministry directed the inquiry to the relevant authorities about reports on Tuesday. However, Wang Wenbin, spokesperson MOFA China, did acknowledge that Chinese authorities have recently taken relevant measures against Australian products exported to China following the law and regulations.
At the same time Scott Morrison, Australian PM stated reporters in his country that his government is looking for the clarification on the reports. Moreover, till now, the country has to listen reality from the Chinese Officials.
Australia Needs to Avoid Trade War with China
China has imposed hefty tariffs on Australian winemakers, and banned or added large custom duty on exports of various products like beef and barley.
Morrison stated on Tuesday that Australia sends thermal coal of worth $3 billion to China every year. Moreover, for coal exports used for generating power, Japan is a bigger market as compared to China. In 2018-2019, Australia exported about $10.5 billion worth coal to China.
However, it isn’t easy to gauge the effect of any move against Australian coal on trade. Australian media reported weeks ago that million dollars worth of coal already kept off the coast of China. It is an indication that Beijing was informally putting pressure on Australia’s key mining industry.
The investors in Australia’s major coal producers are giving reports a bad impression since, on Tuesday, shares in Yancoal Australia and Coronado Global dropped more than 8% in Sydney. Moreover, Whitehaven Coal fell nearly 6% on Tuesday. Furthermore, this week, the shares are down falling 10% so far.
The Analysts at ANZ Research reported that Australian exporters spotted more buyers in Vietnam, South Korea and Japan. Further added that despite the Chinese ban, Australia’s coal exports are elevating well.