China’s potential $10bn threat to Queensland


There is a $10 billion threat to Queensland's economy from fears of Chinese restrictions on Australian coal, in a move which could hamstring the industry.

Trade Minister Simon Birmingham said he was reaching out through diplomatic channels but admitted Australia had concerns about a number of trade decisions made by China this year.

There are reports that the import of Australian coal to China could be slowed or restricted, and that steel mills in China have been told not to buy our coal, but the seriousness of the evolving development is yet to be confirmed.

The move would cripple Queensland's coal industry, which does nearly $10 billion in coal trade with China.

China bans barley imports from Australia's largest exporter: China has banned barley imports from Australia's largest exporter CBH claiming the product had harmful weeds in its grain.


Industry sources say approval delays have been noticed for suppliers of both metallurgical and thermal coal to get access, with this typically more of an issue at the end of the calendar year as quotas get exhausted.

Import restrictions have been happening at varying levels over the past three years.

But Department of Foreign Affairs and Trade data reveals that in August this year our coal trade with China dropped to just $642 million - the lowest monthly exports in at least two years and half of what it was the same time last year. It is yet to be seen whether this will be a longer trend or a blip.



Government considering WTO action against China: Agriculture Minister: Agriculture Minister David Littleproud has told Sky News the federal government is considering its options with respect to action against China at the WTO over recent trade disputes on beef, barley, and wine.


China's foreign affairs ministry spokesman denied knowledge of the situation on Monday night.

Industry sources have said the situation appeared to still be evolving.

Queensland does $9.9 billion in coal trade with China, making up the vast bulk of Australian's $14 billion in exports.

Japan has overtaken China as Australia's top purchaser of coal but Queensland sells just $4.5-6 billion of the resource to Tokyo.






Relations between Australia and China have been increasingly rocky, with various trade restrictions already imposed on beef, barley and wine.

Just over two weeks ago a report from the Chief Economist said China was propping up the coal market, as the only international buyer to keep strong demand during COVID-19, even as it warned that "there remains a risk of Chinese government intervention to restrict coal imports".

About 50,000 Australians are directly employed by coal mining.

Earlier this year, China's state-owned media The Global Times issued a pointed warning, claiming there was a "domestic glut" in its own coal market and that this could hit Australia's coal exports as Canberra "moves to do the US' bidding".




China-Australia relations continue to deteriorate: China has warned students not to travel to Australia as relations between the two nations deteriorate further. (AAP Video)


Despite the potential emerging troubles, some companies like BHP have seen their coal imports to China increase in 2020 so far.

Prime Minister Scott Morrison on Tuesday played down the reports, saying they were raising the issues with relevant authorities, but that domestic quotas were not uncommon in China.

"It is not uncommon that from time to time, the Chinese government will have domestic quotas to support local production and local jobs in China," he said.

"I can only assume, based on our relationship and based on the discussions we have with the Chinese government, that that is just part of their normal process."

Minerals Council Australia boss Tania Constable said trade with China changes through the year based on a range of factors, including quotas.

"Australia will continue to see demand for its high quality of coal and the medium term outlook remains positive," she said.

Trade Minister Simon Birmingham says China remains an important trading relationship for Australia. Picture: NCA NewsWire/Gary Ramage
Trade Minister Simon Birmingham says China remains an important trading relationship for Australia. Picture: NCA NewsWire/Gary Ramage

Senator Birmingham said Australia had concerns over a number of decisions taken by China this year.

"China remains an important trading relationship, an important regional partner and the Australian Government continues to believe that our produce across a range of different categories provides for a mutually beneficial trading relationship," he said.

"It supports Australia's economy, China's economy, but also ultimately growth and prosperity across the region, as it has for many years."


China ‘goes after Australia’ with brand new iron ore ‘threat’ : Sky News host Paul Murray says “there is a brand new threat” issued by the Chinese Communist Party who have said they “are ready to hurt the Australian economy”. China’s The Global Times reported “it seems the Australian government has no intention of sowing new troubles in its trade with China, but the possibility of deteriorating tensions escalating into a trade war should not be ignored”. Mr Murray said it is clear China is once again “threatening us” and they "are confirming by their actions that they are going after us”. “First it was barley, then a bit on beef and now the big game, iron ore”. The Age reported “China’s customs authorities have released new rules coming into force on June 1 that officials would conduct quality inspections for iron ore shipments at the request of the buyer”. “The buyer of course is the Chinese Communist Party,” Mr Murray said.









Originally published as China's potential $10bn threat to Queensland