If true, the reports would “indicate that the Chinese authorities are using discriminatory trade practices,” Birmingham told Radio National in Australia. China has already banned or reduced tariffs on a range of other Australian exports.
Asked by reporters on Tuesday about the reports, China’s Foreign Ministry addressed questions to the “ relevant authorities. ” But spokesman Wang Wenbin did acknowledge that “the Chinese authorities have recently taken relevant action against some Australian products being exported to China in accordance with the law and regulations.”
Relations have deteriorated since April, when Morrison called for an international investigation into the origins of the coronavirus pandemic. Beijing called that movement ‘political manipulation’ at the time.
In the months since, China has imposed high tariffs on Australian winemakers and banned or taxed exports of other products, including beef and barley.
“This lack of transparency makes it difficult to say how much escalation this news is,” said Sean Langcake, senior economist at Oxford Economics, noting the existing disruptions in the thermal coal trade. “These have clearly not been resolved, and it is difficult not to see this news as a further deterioration.”
Investors in Australia’s top coal producers consider the reports a bad sign. Shares in Coronado Global and Yancoal Australia each fell more than 8% in Sydney on Tuesday. Whitehaven Coal is down nearly 6% on Tuesday and is down 10% so far this week.
Analysts from ANZ Research wrote in a research note that the Chinese reports confirm “what has been assumed since reports of import restrictions on coal from Australia appeared in October”. They noted that while China is a major market for Australian thermal coal – it accounted for nearly a third of Australia’s total exports in 2018 – that market share has since been declining.
“Australian exporters have found additional buyers in South Korea, Vietnam and Japan,” the analysts wrote. “As such, we see Australia’s thermal coal exports holding up relatively well, despite the Chinese ban.”
– Angus Watson contributed to this report.