China-Australia relations: Canberra 'very concerned' over reports of 'discriminatory' coal ban
Canberra is seeking clarification from Beijing over reports that it has blocked Australian coal imports, in what could be a "breach" of China's commitments as a member of the World Trade Organization (WTO).
China's top economic planning agency, the National Development and Reform Commission (NDRC), approved 10 major power generators over the weekend to import coal to address a domestic supply shortage, except from Australia, state-owned tabloid Global Times reported.
The NDRC and the national coal industry body, China Coal Transportation & Distribution (CCTD), have not yet made an announcement about a ban, but the foreign ministry said on Tuesday afternoon any export restrictions were being handled by relevant government departments in line with Chinese rules and regulations.
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Australian trade minister Simon Birmingham said on Tuesday the government was "very, very concerned" about the reports, adding that type of boycott could "constitute a breach of China's commitments" as a WTO member nation.
"These actions, if true, would potentially constitute discriminatory action against Australian producers, potentially constitute a breach of the type of undertakings that China has made to Australia and to the world in relation to their trade practices, and potentially harm China's ability to meet the other types of commitments it's given to the world in relation to its emissions profile," he said during a press conference in Sydney.
Under the WTO rules, countries cannot discriminate between trading partners, except in certain circumstances - for example, if a product were contaminated or could pose a threat to human health. Anti-dumping provisions are also available to trading countries to protect their domestic market.
Australian Prime Minister Scott Morrison told the media in Tasmania that the government was waiting for clarification from Beijing. Though diplomatic lines remained open, he admitted there was no timetable for direct ministerial or leader-level discussions.
Birmingham said it was unacceptable the government and Australian businesses had to find out about these decisions via Chinese media outlets.
The reported ban is the latest escalation in a series of trade actions from China that began in April, when Australia called for an international inquiry into the origins of the coronavirus without consulting Beijing.
Since then, China has imposed provisional anti-dumping duties on barley and wine, and curbed a host of Australian imports including logs, lobsters, sugar and cotton. Beijing has cited contamination, pests and shipment errors for the restrictions.
The Chinese Ministry of Foreign Affairs did not confirm the coal ban when asked about it on Tuesday. However, it refuted allegations China had breached trade commitments and questioned if Australia had gone against its own promises to allow open investment and trade, after denying myriad Chinese deals in the past two years, including blocking Huawei Technologies Co. from the country's 5G network.
"Australia regards itself as a victim and accuses China, which confuses the audience," foreign affairs spokesman Wang Wenbin said.
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"China does not accept it. Australia has politicised relations, violated market principles and discriminated against Chinese companies."
"Interfering in the momentum of China-Australia relations is causing damage to Australia's reputation ... the violation of basic practice of international relations; this is the real thing we need to worry about."
Morrison said the deteriorating relationship could be salvaged if both countries made an effort, but denied he had "mismanaged" the relationship.
"What our government has done has stood up for Australia's sovereign interests" he said.
Coal traders in China and around Asia said they had not heard about an official ban or any changes to the unofficial restrictions placed on Australian coking and thermal coal imports in October, when Chinese coal import quotas for the year had been exhausted.
More than 50 vessels laden with Australian coal have been stranded outside Chinese ports since June, waiting to offload orders that were placed before the verbal ban, data by Bloomberg and data intelligence firm Kpler showed.
This is not the first time Australia has been overlooked for coal imports since the October restrictions. Late last month, China increased its coal import quota for thermal coal, which is used for power generation, by 20 million tonnes until the end of the year, again excluding Australia.
Russia, Indonesia and Australia are the biggest exporters of thermal coal to China, while Mongolia, Russia and Australia dominate exports of coking coal, which is used to make steel.
China's decision to curb Australian coal and tighten domestic coal production to lower carbon emissions has caused coal prices to shoot up on the.
On Monday, the Chinese National Energy Administration said in November electricity consumption rose 9.4 per cent compared with the same period last year.
While Australia waits for confirmation of the coal ban, Birmingham said the government was close to finalising its case for a WTO complaint against China's anti-dumping duties on Australian barley.
Additional reporting by Catherine Wong
This article originally appeared on the South China Morning Post (SCMP).
Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.
