Chinese authorities at the Port of Dalian have blocked the entry of vessels carrying Australian coal. A spokesperson with the Chinese government-owned Dalian Port Group also announced a new limit on the total amount of foreign coal allowed in for the remainder of the year. This move is just the latest in a series of financial policies the Chinese have made against Aussie coal since the relationship between the countries cooled in 2017. Reuters reports that recently, Chinese customs officials have been intentionally stalling the clearing of Australian fuel shipments.
“The goals are to better safeguard the legal rights and interests of Chinese importers and to protect the environment,” said the Chinese foreign ministry spokesman Geng Shuang, according to Reuters. Geng also claimed the latest actions are “completely normal.”
Although Dalian is one of the largest ports in China and the world, other smaller ports operated by the Dalian Port Group have also joined the ban. Australian coal makes up around 50% of China’s total coal import. The ports will continue to accept coal shipments from Russia and Indonesia, according to Reuters. Although exports to China account for less than 2% of Australia’s total export tonnage, the new ban symbolizes a further souring of relations between the two countries.
“We continue to engage closely with industry on matters of market access. China is a valued partner of Australia and we trust that our free trade agreement commitments to each other will continue to be honored,” said Simon Birmingham, Australia’s Minister for Trade.
With the announcement of the ban, many Australian energy investors began to fear that further damage from the move may be inevitable. Even though China represents a small minority of the country’s total shipments, some fear other nations could start to question the quality of Aussie coal, according to a report from Business Insider.
While this latest play by the Chinese is at surface level a purely economic move, some experts feel the ban has more to do with politics than finance. The ban comes right before trade talks between Beijing and Washington are set to kick off, and Australia has long been an important U.S. ally in the Pacific, according to an analysis written by ABC News staff. Australia also recently banned the import of 5G products made by China’s Huawei Technologies, although Australian Treasurer Josh Frydenberg claimed the Huawei decision was unrelated in the coal ban.
“Well, I wouldn’t jump to conclusions,” said Frydenberg. “The Australia-China trading relationship is exceptionally strong and exceptionally important.”