Australia fears Chinese embargo on coal

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Australia fears Chinese embargo on coal


A Chinese embargo on coal would have serious consequences for the Australian economy, which is very dependent on its raw materials.


Several trade publications have reported that state-controlled Chinese steel mills and energy suppliers have been


© AFP
Several trade publications have reported that state-controlled Chinese steel mills and energy suppliers have been “verbally instructed” not to buy Australian coal. (Illustrative image)


Canberra on Tuesday asked Beijing to clarify matters as several media echoed possible Chinese restrictions on imports of Australian coal. This could weigh a little more on an Australian economy battered by the pandemic.

Trade Minister Simon Birmingham said he had asked China through diplomatic channels whether it had indeed instructed Chinese groups to stop buying Australian coal, which would be a retaliatory measure against a backdrop of worsening prices. bilateral relations. “I have had discussions with the Australian industry, and we are getting closer to the Chinese authorities on this speculation,” he told Sky News.

He did not go so far as to confirm that an unofficial coal embargo was in place. But his words tend to give credibility to a certain amount of information that has been circulating in recent weeks. “I don’t want to get into this speculation, but we are working with the industry, we are taking action and we are talking with China,” he said.

“Verbal instruction”

Several trade publications, including S&P Global Platts, have reported that state-controlled Chinese steel mills and energy suppliers have been “verbally instructed” to stop buying Australian coal from authorities.

Relations between China and Australia, already strained on a whole series of files, got even worse when Prime Minister Scott Morrison supported American requests for an investigation into the coronavirus epidemic that appeared in China. A Chinese embargo on coal would have serious consequences for an Australian economy very dependent on its raw materials, and which is experiencing its first recession in 30 years because of the impact of the pandemic.

It would also be a slap in the face for the Australian conservative government which, turning a blind eye to environmental considerations, has only recently affirmed its unconditional support for the coal industry in order to please a whole section of its electorate.

Degradation of relations

Australian ministers said they are finding it increasingly difficult to reach out to their Chinese counterparts amid deteriorating bilateral relations. Australia’s largest trading partner, China suspended beef imports from four major Australian suppliers in the spring, then imposed tariffs of 80.5% on Australia’s barley.

Then, in June, Beijing invited Chinese tourists and students to avoid Australia, justifying this recommendation by “racist” incidents against people of Chinese origin. Beijing recently launched an anti-dumping investigation into Australian wine, which could lead to heavy taxes.

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