Coal has become the latest casualty in Australia’s trade war with China as Beijing escalates tensions further with another spiteful swipe at the federal government.
Australian coal exports to China, worth $14billion a year, were officially blacklisted at a high-powered meeting between National Development Reform and Commission and Chinese power companies on Saturday.
There are fears iron ore exports may be next on Beijing’s hit list in the wake of tariffs on Australian wine and barley on top of sanctions on beef, timber, cotton, lamb and lobster.
It comes as China’s government-controlled Global Times newspaper took another cheap shot at Canberra on Monday night by publishing an offensive cartoon while accusing the federal government of ‘megaphone diplomacy’.
Coal is the latest Australian export to be blacklisted by China (pictured, the BHP Mt Arthur coal mine in Muswellbrook in the Upper Hunter region north of Sydney)
China’s state-controlled newspaper has taken another spiteful swipe at the federal government with this cartoon, showing Australia controlled by America
The publication, a government mouthpiece, reported on Australia’s exclusion from China’s overhauled coal policy on Sunday.
‘China’s top economic planner on Saturday gave approval to power plants to import coal without clearance restrictions, except for Australia,’ the article states.
China will now rely on Mongolia, Indonesia and Russia for its ‘rich’ imported coal sources.
‘Since Mongolia has a geographic advantage that allows lower transportation costs than any other exporters, it could take a large share from Australian coal,’ Chinese Academy of Social Sciences’ Institute of Energy Economy director Wang Yongzhong told the publication.
‘The relationship between China and Australia has been deteriorating and Australia is gradually losing the Chinese market.’
Australia’s relationship with China has been deteriorating for many months, with its communist government imposing crippling trade tariffs on a range of goods.
Iron ore is one of Australia’s most profitable exports, and is worth $67billion globally.
The price has remained strong in 2020 as Brazil, the world’s biggest producer, has suffered production setbacks due to the coronavirus pandemic.
Australia supplies more than 60 per cent of China’s iron ore, which Beijing needs to make steel. Pictured is iron ore in Western Australia’s Pilbara region
But the China Iron and Steel Association has complained the way the prices are set is unfair and the bemoaned the ‘failed’ system.
West Australian Treasurer Ben Wyatt has admitted he is ‘always’ worried about China’s attitude towards iron prices.
‘The price of iron ore, when it gets to these levels unsurprisingly you get some pushback out of China whether it’s based on transparency issues or whatever it happens to be,’ Mr Wyatt said on Monday.
‘I’m still reasonably confident that the demand for our iron ore will stay just because of the quality of the product, how close we are to market, we’re a reliable supplier … but we have to continue to work on this (relationship with China).’
Meanwhile, coal exports to China had already seen a dramatic decline before being formally blacklisted, plummeting by 78 per cent to 1.4m tonnes in November, The Australian reported.
More than 80 ships carrying Australian coal were recently stranded off the Chinese coast unable to offload more than more than $1.1billion in cargo.
Tensions between Beijing and Canberra have helped push up the iron-ore price as importers scramble to get hold of the mineral
China boldly claimed the demand for Australian wine will ‘crater’ after the industry was dealt a ‘destructive blow’ by new crippling tariffs (pictured, Australian wine on sale in Shanghai)
The Global Times took another swipe at the federal government on Monday where it went as far as describing Australia as ‘ the most anti-China country in the world today.’
The article accused Australia of being an ‘anti-China pioneer’ and switching its allegiances to the US.
It also includes an offensive cartoon of a small Australian shark being circled by a much larger US one.
‘With the rampant pandemic and rapid changes in the international economic and political order, Australia has chosen an extreme and irrational path,’ China University of Mining and Technology’s Centre for Australia Studies researcher Xu Shanpin writes.
Last month Beijing had blocked Australian exports including coal and seafood before slapping a 212 per cent tariff on Aussie wine (pictured in Shanghai)
‘Canberra has adopted “megaphone diplomacy,” with the hope to establish an image that it is ‘defying power and adhering to principles’ and garner international attention,’
‘While Australia’s security and strategic needs for the US are increasingly unprecedented, the US has implemented a global strategic contraction.
‘It is constantly asking Australia to assume more alliance responsibilities and burdens, forcing it to put US interests above Australia.’
It comes a fortnight after the Global Time published a cartoon mocking Australian soldiers in reference to recent allegations that Australian soldiers committed war crimes, including killing 39 Afghans.
Over the weekend, the newspaper referred to Australia as ‘evil’ and said China’s ‘goodwill’ towards the nation was ‘futile’.
A former minister has called on Australia to tax iron ore exports to China. Pictured is iron ore from Australia is unloaded at China’s Rizhao Port
Australia’s total export markets in 2019
1. China: $135 billion (33% of total Australian exports)
2. Japan: $36 billion (9%)
3. South Korea: $21 billion (5%)
4. United Kingdom: $16 billion (3.8%)
5. United States: $15 billion (3.7%)
Luckily Beijing is far less likely to impose tariffs on iron ore because it imports 60 per cent of its total from Australia and needs the mineral to make steel.
Former resources minister Matt Canavan wants to punish China for harming Australian producers by taxing iron ore exports to the communist superpower.
‘We need to make the Chinese Communist Party pay a price because that will be the only thing that will stop further trade restrictions,’ he wrote in The Australian.
Relations between China and Australia have rapidly deteriorated since Prime Minister Scott Morrison called for an inquiry into the origins of coronavirus which was identified last year in the Chinese city of Wuhan before spreading around the world, causing 1.5million deaths.
More industries are concerned if they will be next on the chopping block as the Chinese Communist Party continues to punish Canberra for speaking out on its human rights record.
Beijing’s decision to slap tariffs on Aussie wine and barley and block several other exports including wood, coal and seafood has badly affected some producers.
Australia’s biggest allies plot fightback against China in response to brutal trade war – with the US, UK, Canada and New Zealand considering slapping their own sanctions on Beijing to teach it a lesson
Our biggest allies could jump to Australia’s defence in its escalating trade war against China as tensions between the two nations continue to sour.
Nations such as New Zealand, Canada, the United Kingdom and the United States could join forces with Australia and hit back to Beijing by imposing their own retaliatory sanctions on Chinese goods and produce.
Cotton and lamb exports are the latest to join the growing list of Australian products sanctioned by China, which include beef, barley, wine, lobster, cotton, seafood and coal.
Australia is part of Five Eyes, a long running intelligence alliance alongside Canada, New Zealand, the United Kingdom and the United States.
Five Eyes nations are reportedly in preliminary discussions on how to respond to China’s sanctions with one source describing cooperation within the alliance as ‘off the charts at the moment’, NewsCorp reported.
China has taken aim at the Australian wine industry with 212 per cent tariff. Pictured is a wine representative inspecting Australian wine in Shanghai
Australian allies such as New Zealand, Canada, the United Kingdom and the US could join forces to hit back at China’s trade war. Pictured is New Zealand Prime Minister Jacinda Ardern
Talks are gaining momentum among high level federal government officials in Canberra and is also being given much consideration in Washington, the publication reported.
There are several strategies as to how Five Eyes could hit back at China.
One option is that all five nations impose own sanctions on Chinese goods, produce and services.
Another would be for Australia to respond with retaliatory tariffs on products from Beijing, and the four allied nations showed their support by refusing to make up the shortfall in Chinese exports.
There’s also growing talk Japan could join and be part of a new Six Eyes alliance.
Australia is a member of Five Eyes, an intelligence alliance alongside Canada, New Zealand, the United Kingdom and the United States. Pictured is British Prime Minister Boris Johnson
Timber has joined a growing list of Australian exports. Pictured is Australian eucalyptus firewood
Canadian Prime Minister Justin Trudeau (pictured) could jump to Australia’s defence in its escalating trade war against China
Australian Strategic Policy Institute’s International Cyber Policy Institute director Fergus Hanson recently authored a report calling for a Five Eyes response to China’s trade sanctions to be similar to NATO’s article 5, which states an attack on any one NATO country is an attack on them all.
NATO invoked Article 5 the day after the September 11 terrorist attacks in 2001.
Mr Hanson believes retaliatory sanctions would ‘look to do the same thing in China to make sure the CCP realise it’s a two-way street.’
‘I think it’s pretty clear our current approach is not a solution to this problem. What we are doing now is a failing strategy,’ he told NewsCorp.
‘It is absolutely critical we turn the tide on this.’
‘You’d only have to do it once to demonstrate coercive diplomacy was now too costly.’
How China’s feud with Australia has rapidly escalated
2019: Australian intelligence services conclude that China was responsible for a cyber-attack on Australia’s parliament and three largest political parties in the run-up to a May election.
April 2020: Australian PM Scott Morrison begins canvassing his fellow world leaders for an inquiry into the origins of the coronavirus pandemic. Britain and France are initially reluctant but more than 100 countries eventually back an investigation.
April 15: Morrison is one of the few leaders to voice sympathy with Donald Trump’s criticisms of the World Health Organization, which the US president accuses of bias towards China.
April 21: China’s embassy accuses Australian foreign minister Peter Dutton of ‘ignorance and bigotry’ and ‘parroting what those Americans have asserted’ after he called for China to be more transparent about the outbreak.
April 23: Australia’s agriculture minister David Littleproud calls for G20 nations to campaign against the ‘wet markets’ which are common in China and linked to the earliest coronavirus cases.
April 26: Chinese ambassador Cheng Jingye hints at a boycott of Australian wine and beef and says tourists and students might avoid Australia ‘while it’s not so friendly to China’. Canberra dismisses the threat and warns Beijing against ‘economic coercion’.
May 11: China suspends beef imports from four of Australia’s largest meat processors. These account for more than a third of Australia’s $1.1billion beef exports to China.
May 18: The World Health Organization backs a partial investigation into the pandemic, but China says it is a ‘joke’ for Australia to claim credit. The same day, China imposes an 80 per cent tariff on Australian barley. Australia says it may challenge this at the WTO.
May 21: China announces new rules for iron ore imports which could allow Australian imports – usually worth $41billion per year – to be singled out for extra bureaucratic checks.
June 5: Beijing warns tourists against travelling to Australia, alleging racism and violence against the Chinese in connection with Covid-19.
June 9: China’s Ministry of Education warns students to think carefully about studying in Australia, similarly citing alleged racist incidents.
June 19: Australia says it is under cyber-attack from a foreign state which government sources say is believed to be China. The attack has been targeting industry, schools, hospitals and government officials, Morrison says.
July 9: Australia suspends extradition treaty with Hong Kong and offers to extend the visas of 10,000 Hong Kongers who are already in Australia over China’s national security law which effectively bans protest.
August 18: China launches 12-month anti-dumping investigation into wines imported from Australia in a major threat to the $6billion industry.
August 26: Prime Minster Scott Morrison announces he will legislate to stop states and territories signing deals with foreign powers that go against Australia’s foreign policy. Analysts said it is aimed at China.
October 13: Trade Minister Simon Birmingham says he’s investigating reports that Chinese customs officials have informally told state-owned steelmakers and power plants to stop Aussie coal, leaving it in ships off-shore.
November 2: Agriculture Minister David Littleproud reveals China is holding up Aussie lobster imports by checking them for minerals.
November 3: Barley, sugar, red wine, logs, coal, lobster and copper imports from Australia unofficially banned under a directive from the government, according to reports.
November 18: China releases bizarre dossier of 14 grievances with Australia.
November 27: Australian coal exports to China have dropped 96 per cent in the first three weeks of November as 82 ships laden with 8.8million tonnes of coal are left floating off Chinese ports where they have been denied entry.
November 28: Beijing imposed a 212 per cent tariff on Australia’s $1.2 billion wine exports, claiming they were being ‘dumped’ or sold at below-cost. The claim is denied by both Australia and Chinese importers.
November 30: Chinese foreign ministry spokesman Lijian Zhao posted a doctored image showing a grinning Australian soldier holding a knife to the throat of an Afghan child. The move outraged Australians.
December 12: Australian coal is officially added to a Chinese blacklist.