’We are very concerned’: China issues new threat against Australian coal
Deputy Prime Minister Michael McCormack is concerned coal exporters could face a tougher time selling the commodity into China after the Asian nation warned state-owned power plants not to buy Australian product.
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Deputy Prime Minister Michael McCormack is concerned coal exporters could face a tougher time selling the commodity into China.
The Chinese government is reportedly warning state-owned power plants not to buy new shipments of Australian thermal coal and instead favour domestic products.
Mr McCormack said Trade Minister Simon Birmingham and diplomats were attempting to fix the issue.
“Of course we’re very concerned by it,” he told the ABC on Friday.
“But we have a two-way relationship with China. China needs Australia as much as Australia needs China and we want to make sure that whatever we do is in a careful and considered way.”
China cooling on Australian coal could signal the latest escalation in trade tensions between the two nations.
Coal exports faced delays at Chinese ports last year.
Beijing has slapped a prohibitive 80 per cent tariff on Australian barley, while four major abattoirs have been banned from sending red meat to China. Mr McCormack said Chinese steel mills and power plants would need high-quality Australian coal to operate.
“We want to make sure that our coal exports have a destination.
“China has long been a customer of ours. They know the quality of our coal, they know the quality of our iron ore and other resources.”
Senator Birmingham is being ignored by his Chinese counterpart. Home Affairs Minister Peter Dutton said the stonewalling was part of China’s tactics.
“We don’t think they’ve got a legal basis for imposing these tariffs and we want them to change their position,” he told the Nine Network.
He said Australia would stand firm in its values after a push for global coronavirus inquiry stung China.
Thermal coal, which is used to generate power, is Australia’s second largest export to China after iron ore.
China has also announced new supervising rules for iron ore, with opinion divided on its impact for Australian exporters.
Senator Birmingham is hopeful the changes could speed up the entry of iron ore into China through fewer batches being checked.
“Early indications of talking to the industry are indeed that this would provide an opportunity for benefits both to China and to Australia,” he said.
But the Global Times - considered a media voice of the Chinese government - has warned Australian iron ore imports could be hurt by political tensions between the two countries.
“This is another implicit warning to Australia,” Yu Lei, a chief research fellow at Liaocheng University, told the newspaper.
“It is associated with how Australia has acted, and a general decline in demand for steel on the global level.”
AUSSIE IRON ORE EXPORTS UNDER THREAT
Australian iron ore exports to China are under threat by changes to inspection rules, according to Chinese media who say this is as warning in the ongoing trade dispute.
Chinese customs officials have said the changes taking effect in June are designed to “streamline procedures” at ports, but there are concerns Australian iron ore could be selectively targeted for inspections that would delay imports.
Trade Minister Simon Birmingham and the Minerals Council of Australia have welcomed the improvements, which they say will improve our trade relationship.
But The Global Times, regarded as the Chinese Government’s mouthpiece, has warned Australian iron ore imports could be hurt by the change.
“This is another implicit warning to Australia,” Yu Lei, a chief research fellow at Liaocheng University, told the newspaper.
“It is associated with how Australia has acted, and a general decline in demand for steel on the global level.”
Trade Minister Simon Birmingham said Australia remained committed to the “mutually beneficial trade” with China.
“We welcome any improvements in administrative arrangements that could streamline the customs clearance of iron ore imports,” he said.
“Such easing of administrative barriers and costs would be a positive example of the further opening of Chinese markets that President Xi has previously committed to, as well as a reform that can help with global economic recovery.”
Minerals Council of Australia chief executive Tania Constable said upgrade “recognises the high quality of Australia’s ore”
“The streamlining of China’s iron ore testing is a positive outcome for Australia’s iron ore,” she said.
“Australia’s iron ore miners have been the leading suppliers to China’s steel industry this year and supported its post-COVID economic recovery.”
China is the world’s largest steel producer and a key market for the Australian iron ore industry, accounting for about 80 per cent of exports.
But the reliance goes both ways, with Australia providing about two thirds of China’s iron ore imports, which Beijing relies on to produce steel to support its massive infrastructure projects including roads, bridges and major buildings.
The comments come after China announced an 80 per cent tariff on barley imports and Australia’s successful push to have an international inquiry into the origin of the COVID-19 virus.
The Global Times also recently warned Australia that China could “easily turn” to Brazil for iron ore.
“While China is the only choice for Australia’s massive commodity exports, Australia is not necessarily the only option for China,” the paper said.
“There are also other countries like Brazil that can supply huge amounts of iron ore, coal or LNG to China.”
But in reality Brazil’s iron ore exports have been struggling since January when minerals company Vale was ordered to close several mines pending safety inspections after a tailings dam at one of its mine collapsed killing 257 people.
In March Vale’s iron shipments were 13 million tonnes short of expectations.
US ‘STANDS WITH’ AUSTRALIA
US Secretary of State Mike Pompeo has slammed the Chinese Government for hitting Australian barley with a tariff for demanding a coronavirus inquiry, while Labor remains at odds on how to deal with Beijing.
Mr Pompeo unleashed on the Chinese Communist Party for targeting Australia with an anti-dumping 80 per cent tariff on barley imports as punishment for the “simple act” of pursuing an independent COVID-19 review.
“We stand with Australia and the more than 120 nations now who have taken up the American call for an inquiry into the origins of the virus, so we can understand what went wrong and save lives now, and into the future,” Mr Pompeo told reporters in Washington.
“The Chinese Communist Party chose to threaten Australia with economic retribution for the simple act of asking for an independent inquiry into the origins of the virus.
“It’s not right.”
His attack came after The Global Times newspaper, widely regarded as the mouthpiece of the Chinese Government, this week called Australia the “dog” of US President Donald Trump.
But Mr Pompeo’s support won’t stop the US from cashing in on the tariff against Australia, with China already indicating it will buy more American barley instead.
Labor’s foreign affairs spokeswoman Penny Wong said she agreed with Mr Pompeo that “economic coercion of any sort is unacceptable in today’s world” welcoming the US’ support.
“In that vein, I hope that he and others will ensure that the trade deal between President Trump and President Xi doesn’t disadvantage Australian farmers because our farmers need all the support we can give them at this time,” she said.
Ms Wong said Australia had a “challenging relationship” with China, and had to learn to manage the difference in a way that served the national interest without sparking an unhelpful war of words.
But her Labor colleague, agriculture spokesman Joel Fitzgibbon said he wasn’t convinced by the idea China was “bullying” Australia.
“Certainly we have to be robust in defence of our national interest,” he said.
“But let’s just recap what’s been happening here for the last few years, starting under Malcolm Turnbull.
“We’ve been demonising the Chinese and their system of governance.”
Mr Fitzgibbon pointed to Mr Turnbull’s “discriminatory” changes to Foreign Investment Review Board thresholds, and Prime Minister Scott Morrison’s call for increasing the powers of the World Health Organisation as examples of Australia’s unfair treatment of China.
“We’ve had our most recent and current Prime Minister, basically saying things like we should send weapons-style supervisors into China, against their will,” he said.
“I have no idea how he thought he was going to achieve that.
“So, there have been some problems here in our relationship with China for some time.
“It’s our largest trading partner, and we need to normalise this relationship again.”
Meanwhile China has refused to clarify if a reported “hit list” of Australian exports it plans to target, including fruit, dairy, wine and seafood, actually exists.
Chinese Foreign Ministry spokesman Zhao Lijian said China had “never sought selfish gains at the expense of others”.
“We hope Australia will work with us to create favourable conditions for practical cooperation with actions that are conducive to bilateral relations and mutual trust,” he said.
Mr Zhao said China championed seeking common ground, while “shelving differences” looking for win-win cooperation.
“Like we stressed repeatedly, China always adheres to mutual respect and equal-footed treatment while developing friendly relations with other countries,” he said.
Originally published as ’We are very concerned’: China issues new threat against Australian coal
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