China Suspends Ban on Australian Coal Imports

Response to Economic Recession and Shift to Tougher Foreign Policy
Likely to Lift Restrictions on Australian Lobster Imports

[Asia Economy Reporter Kwon Haeyoung] China has resumed imports of Australian coal, which it had banned for the past two years.

On the 12th (local time), the Wall Street Journal (WSJ) reported, citing multiple sources, that Guangdong Province Customs received a notice from the local government allowing the clearance of Australian coal.

Earlier, on the 3rd, the National Development and Reform Commission (NDRC) of China permitted state-owned enterprises such as Baosteel, China Datang Corporation, China Huaneng Group Corporation, and China Energy Investment Corporation to resume imports of Australian coal. Some companies have already placed orders, and shipments of Australian thermal coal are expected to arrive at Chinese ports as early as this month.

China had banned imports of Australian coal since the end of 2020. This was effectively a retaliatory measure after Australia called for an international investigation into the origins of COVID-19. In addition to coal, China imposed high tariffs or halted imports on Australian products such as barley, wine, and lobster.

Regarding the suspension of the Australian coal import ban, WSJ evaluated it as a sign that China is responding to the economic downturn while diplomatically easing its tough foreign policy stance.

China, the world's largest coal consumer, halting imports from Australia caused significant changes in the coal trade market. Indonesian and Russian coal exports to China increased by 39% and 44% respectively last year. China also increased its domestic production by 10%. Since Australian exporters shifted their exports to India and European markets after being blocked from China, there is an opinion that it is uncertain whether the coal trade market will return to its previous structure.

There are also prospects that China may extend the suspension of the import ban to other products. Hong Kong's South China Morning Post (SCMP) reported that China will soon resume imports of lobster. According to Australian government data, over 90% of Australian lobster exports in 2019 went to China, but as relations between the two countries deteriorated, China's imports of live Australian lobster were almost non-existent as of the end of 2020.