China coal ban sounds alarm bells and slams Australian dollar

China coal ban Australian imports port exports trade dollar
Chinese officials have unexpectedly and indefinitely banned Australian coal imports from some of its ports.

China has caught Australian coal producers and the Federal Government on the hop with a sudden and indefinite ban on some Australian coal imports.

Sketchy early reports yesterday on the ban by the northern port of Dalian sent the Australian dollar down by one percent but now the currency has recovered a little after official confirmation of the ban was described by the Chinese Foreign Ministry as “normal practice’’.

While Australian coal exports to Dalian’s network of five ports (Dalian, Bayuquan, Panjin, Dandong and Beiliang) represent just 1.8% of Australia’s total coal exports, the coal industry is alarmed that other Chinese coal ports have been delaying shipments of Australian coal by 40 days or more.

Russian and Indonesian coal unaffected

What is particularly concerning is that Australian coal is being singled out while coal shipments from Russia and Indonesia are proceeding as normal.

That could see Australian exporters play second fiddle to Russia and Indonesia because the five Dalian ports have now capped overall coal imports from all sources for 2019 at 12 million tonnes.

In a carefully worded interview, Chinese Foreign Ministry spokesman Geng Shuang described the ban as “normal practice’’ and said Australian coal was targeted as part of inspection measures following risk assessments.

“China’s customs assesses the safety and quality of imported coal, analyses possible risks, and conducts corresponding examination and inspection compliant with laws and regulations,” said Mr Shuang.

“By doing so, it can better safeguard the legitimate rights and interests of Chinese importers and protect the environment.”

Number of issues with China

Foreign policy analysts have been pointing to a number of different issues as possibly playing a part in what appears to be a Chinese campaign to target Australia.

One is the recent cyber-attack on the Australian Parliament by a “sophisticated state actor’’, another is the decision by the Australian Department of Home Affairs to rescind the permanent residency visa of a prominent Chinese businessman Huang Xiangmo while he was out of the country and also the barring of Chinese telecoms giant Huawei Technologies from supplying equipment to Australia’s 5G broadband and telephone network.

Barring Huawei has been controversial

The ongoing US-China trade negotiations have also heightened trade sensitivities, along with the broader conflict between China and the West over Huawei.

Canada arrested and detained Huawei’s chief financial officer Meng Wanzhou and the US, Australia and New Zealand have banned the company – the world’s biggest telecommunications manufacturer – from building any part of their 5G networks, citing the possibility of spying.

Canada and some European countries are still looking at whether they will ban Huawei from their 5G networks.

Ms Meng was arrested on 1 December on behalf of the US pending extradition and charged with bank and wire fraud aimed at violating American sanctions against Iran.

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