Sino-Australian Relations are Spiraling Downwards

Dec 29, 2020

The relationship between Beijing and Canberra continues to deteriorate. The Chinese authorities impose more bans on Australian exports, and the Australians threaten legal actions against China.  

It all began in 2018 when Australia banned Huawei’s 5G network, and then backed an international inquiry into China’s handling of the pandemic in early 2020.  

As retribution, China imposed high tariffs on Australian wine and restricted imports of other products. Restricted imports included beef, cotton, lobster, and others.  The most recent and most significant blow to Australia has been the ban on coal imports. The ban will significantly affect the Australian economy. Especially considering that coal exports to China amounted to roughly $14 billion in 2019.   

“China planned to reduce 100 million tons of coal consumption annually by 2030 to finally accomplish its carbon-neutral goal before 2060, which means fading demand in the coal market. An absence of Australian coal in China is actually beneficial to all other market suppliers,” said the director of the Institute of Energy Economy at the Chinese Academy of Social Sciences, Wang Yongzhong. 

The Global Times, a Chinese state-owned newspaper, recently reported that all coal imports were given the green light, except Australia. Australian Prime Minister, Scott Morrison, warned China not to break the trading agreement, but to no avail. China is taking a harsh stance because it wants to make an example out of Australia.   

How is Australia dealing with this?

Despite the economic toll that it will take on them, Australians seem to support the Australian Prime Minister. According to the Lowry Institute Report 2020, most Australians support a divergence from trade with China.  

The Chinese government has not yet officially announced the ban on Australian coal; however, if or when they do, Morrison is ready to report to the World Trade Organization. Australia is already in the process of filing a complaint against the tariffs China imposed, so they will not hesitate to add an extra complaint.   

Morisson explained that China’s trading practices are causing a lot of uncertainty for other trading partners, adding that: 

“It really is a lose-lose here because Australian coal, compared to that coal that is sourced from other countries, the other countries have 50% higher emissions than Australian coal.”  

Last month, Beijing made public a list of 14 grievances against Australia. In the report, they claimed that Australia sided with the US anti-China campaign and spread misinformation about the treatment of Uyghurs in Xinjiang province.  

Beijing and Canberra are showing no signs of budging on what seem to be irreconcilable differences. We can only guess whether other countries would have flanked Australia economically, but China is certainly not showing any mercy. The only fact is that Sino-Australian relations will never be as they were. Perhaps 2021 will see improved communication and resolutions for both countries.