Beijing drops Australian coal ban
Beijing has scrapped its ban on Australian coal, with a growing armada of bulk carriers leaving terminals Down Under bound for the People’s Republic.
The ban, in place since late 2020 over arguments about the origins of covid, was partially lifted in January when the Chinese government allowed four large importers to restart buying Australian coal. Bloomberg reports today that the ban has now been lifted for all Chinese companies.
Data from commodities platform Oceanbolt shows that in the year to date more than 3.2m tons of coal has already been exported from Australia to China, the majority on capesizes.
“The resumption of coal trades from Australia to China will most likely alter trade patterns fundamentally in favour of longer freight distances, favouring particularly the capesize asset class,” Lorentzen & Co stated in a recent report.
Most western media simplify the trade friction between Australia and China down to Australia’s push for an investigation “about the origins of covid-19”. But the root of the friction was much earlier and goes much deeper. At the demand of the U.S. Trump administration Australia canceled an agreement for China’s Huawei tech giant to build Australia’s 5G network; Australia blocked numerous Chinese investment projects in Australia due to “security concerns”; Australia joined the AUKUS alliance with the US and UK whose overtly stated purpose is to contain China. Of course these decisions are Australia’s right as a sovereign nation, but considering that China is by far Australia’s largest export market with which it enjoys a huge trade surplus and kept the Australian economy booming and out of recession for over 30 years, its silly for Australia to think China would not push back. Some western media are now claiming China is “crawling back” for Australian coal. Nonsense. For the past three years China has gotten all the coal it needs from Indonesia, Russia, South Africa and Mongolia
China does not give in to foreign powers and withstands pressure on demand and supply since the days of the long March. It normally does this by reducing population as it did in the sixties until Deng Xiao ping opened the economy for imports and better quality food.