Current Event: Australian Chinese Trade Dispute

Article by Kerensa Gimre

Last week, the Australian dollar fell as rumors spread that China was banning Australian coal importsindefinitely. Australia was the only country affected by the ban, as China continued to allow imports of Indonesian and Russian coal. Chinese officials claim that Australia’s coal is not banned from importation, but subject to delays because Australia’s coal failed to meet Chinese environmental standards.

Some doubt that the move was motivated by Chinese environmental standards and instead posit that the ban is a political retaliation by the Chinese government in response to Australia blocking Chinese company Huawei from constructing a 5G network due to national security concerns.

Australia claims that the coal ban violates their free-trade agreement with China and could complicate future diplomatic efforts, escalating tensions between the two countries. Last year, China accounted for 22 and 24 percent of Australia’s thermal and coking coal exports, respectively. China is also Australia’s largest trading partner, accepting 34 percent of all of Australia’s exports. A prolonged Chinese ban on Australian coal could have a significant impact on the Australian economy.

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