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China Bars Australian Coal In Political Rift

China Bars Australian Coal In Political Rift

After months of concern over China’s curbs on coal from Australia, signs are growing that the imports have fallen victim to political disputes.

Speculation over China’s motives has been rising since November, when reports first surfaced that Chinese ports had stopped clearing inbound coal shipments until the end of 2018 due to high inventories built up ahead of winter.

While China is the world’s top producer and consumer of coal, it is also the biggest buyer with imports of 281.5 million metric tons last year, according to customs figures.

But the import restrictions in November have extended well into 2019, focusing heavily on Australia.

In early February, The Australian daily reported that customs clearance times for the country’s exports of coking coal had doubled to 40 days at key Chinese ports. The paper cited speculation over “Sino-Australian relations” as a reason for the slowdown.

The Australian pointed to the government’s decision last August to ban Chinese telecom companies Huawei Technologies and ZTE Corp. from participating in the country’s 5G network development due to cybersecurity concerns.

Other issues included Australia’s decision in November to block a bid by Hong Kong-based CK Asset Holdings Ltd. for the gas pipeline business of the country’s APA Group on “national interest” grounds.

Later in February, Reuters reported that Chinese traders had stopped ordering Australian coal because of long wait times for customs clearance at Chinese ports.

The report indicated that only Australian shipments had been targeted for lengthy inspections at five import facilities controlled by the Dalian Port Group in northeastern China’s Liaoning province.

“The traders and a broker said only cargoes from Australia, the biggest supplier of the fuel to the world’s top consumer, were affected,” Reuters said. The report noted that the ban applied to thermal coal used in power plants and industry, as well as coking coal for steel manufacturing.

Reuters also cited differences with China over hacking allegations and freedom of navigation in the South China Sea.

In January, Australian Defense Minister Christopher Pyne backed an increase in Japan’s defense spending and voiced support for more operations within disputed South China Sea boundaries, Australia’s ABC News reported at the time.

In March, Chinese sources told The Australian that a second statement on the South China Sea issue during Pyne’s January visit to Singapore had angered Beijing and led to the coal crackdown.

As implications mounted and the Australian dollar came under pressure, Prime Minister Scott Morrison urged caution “about leaping to conclusions,” AFP News reported. The government sought an “urgent” clarification from Beijing, the BBC said.

Ministry of Foreign Affairs spokesman Geng Shuang said China was conducting a “risk monitoring analysis … to safeguard the legitimate rights and interests of Chinese importers and to protect the environment.”