The impact of China’s actions to avoid Australian products has been revealed – as it faces increasing condemnation from around the world.
China is buying up Russia’s discounted coal as it deepens its alliance with the ostracised resources giant – while at the same time continuing to avoid Australian products.
Following the introduction of trade sanctions against Australia in late 2020, the value of China’s coal imports from Russia has risen sharply, before more than doubling early this year in the wake of the Ukraine war.
Meanwhile the value of coal imports from Australia dropped to nothing, except for a small spike in demand between October and February, according to analysis of China Customs data from The Australian Financial Review.
Beijing has refused to condemn its ally Russia over the invasion of Ukraine, and the two countries have drawn closer in the political, trade and military spheres as part of a “no limits” relationship.
This month, Chinese President Xi Jinping assured his Russian counterpart Vladimir Putin of China’s support on Russian “sovereignty and security”.
New data from S&P Global Market Intelligence showed Russia’s coal shipments to China have increased even though China has ramped up its own domestic production and is importing less overall, CNBC reported.
Russian seaborne coal deliveries to China rose by a whopping 55 per cent in the first 28 days of June, compared to same period last year, for a total of 6.2 million tonnes. There was also a 20 per cent increase in May.
Meanwhile China’s overall coal imports dropped 13.6 per cent, to around 96 million tonnes, compared to a year ago. Its own domestic production rose 10.4 per cent between January and May, data from the National Bureau of Statistics of China showed.
“Despite lower demand and higher domestic coal production, China has been buying significantly higher Russian coal since May 2022,” S&P Global Market Intelligence associate director Pranay Shukla told CNBC.
“This is because Russia has been offering very steep discounts on prevailing international coal prices.”
China’s imports of crude oil from Russia also rose 55 per cent to a record high in May, making Russia the world’s top supplier, a title previously held by Saudi Arabia, Reuters reported.
Russia has slashed the price of its resources as condemnation of its invasion of Ukraine saw the European Union ban all Russian coal imports.
Last month, NATO, the military alliance between 32 North Atlantic countries, said China’s closer ties to Russia went against Western interests, drawing a fiery response from Beijing.
In a sign of growing concern about China, leaders of regional partners Japan, South Korea, Australia and New Zealand also attended a NATO summit for the first time.
Meanwhile Beijing appears to have ended its diplomatic deep-freeze of Australia since Labor won the federal election in May, agreeing to a number of meetings after years of rebuffing its officials, although trade remains a sticking point.
After former prime minister Scott Morrison called for an inquiry into the origins of coronavirus in 2020, China imposed trade restrictions on Australian lobster, beef, cotton and timber. It also placed tariffs on wine and barley, and unofficially blocked coal and copper imports.
Since the change of government, Beijing has agreed to a number of meetings including between new Australian Defence Minister Richard Marles and his Chinese counterpart Wei Fenghe, as well as a meeting between Australia’s ambassador in China Graham Fletcher and Chinese Vice-Minister of Foreign Affairs Xie Feng, The Australian reported.
However, a formal request by Trade Minister Don Farrell to meet his counterpart on the sidelines of a World Trade Organisation meeting in Geneva was dismissed.
Despite China refusing to buy Australian coal, Resource Minister Madeleine King said local miners had managed to find other markets.
“Exports to Japan, South Korea, Taiwan and India grew rapidly, and replaced Indonesian, South African, Canadian and Russian cargoes that had been heading to those countries but were now going to China,” she told the AFR.
“Overall Australian coal export volumes [for metallurgical and thermal coal] edged down by 1.5 per cent in 2021, relative to 2020, but increased by 46 per cent in value terms due to strong growth in global coal prices.”
Meanwhile Prime Minister Anthony Albanese has stepped up sanctions on Russia and promised to stand with Ukraine “for as long as it takes”.
During a visit to the war-torn country last week, Mr Albanese announced an import ban on Russian gold and sanctions and travel bans on 16 more Russian ministers and oligarchs.
Last week, NATO unveiled a new strategic blueprint that said for the first time that Beijing’s stated ambitions and coercive policies challenged its interests, security and values.
Leading NATO power, the United States, has pushed for the alliance to pay greater attention to China, despite reluctance from some allies to switch attention away from its focus on Europe.
On Thursday, Beijing slammed NATO over its “completely futile” warning.
“NATO’s so-called new strategic concept document disregards facts, confuses black and white … [and] smears China’s foreign policy,” foreign ministry spokesman Zhao Lijian told a regular briefing on Thursday.
He added that China “firmly opposes it”.
“We would like to warn NATO that hyping up the so-called China threat is completely futile,” Mr Zhao told reporters.
Ahead of the unveiling of NATO’s new strategy, Beijing had already pushed back against the alliance for increasing its attention on Asia. Actions that undermine the stability of the Asia-Pacific region, Mr Zhao said, were “doomed to fail”.
– with AFP
Originally published as China is buying up discounted Russian coal as it continues to avoid Australian products
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