According to reports from Australian media outlets as well as several international news sources, China will ban imports of seven categories of Australian commodities starting November 6. These include coal, barley, copper ore and copper concentrates, sugar, timber, red wine, and lobster. If the reports are accurate, this would mark China's most extensive crackdown yet on Australian goods.
The Australian Financial Review reported on the 3rd, local time, that calculations show the total value of Australian exports to China listed on this so-called "ban list" amounts to approximately AUD 6 billion (about RMB 28.64 billion).
Although the authenticity of this so-called "ban list" remains questionable, the market has already reacted—on the same day, the share price of an Australian copper-mining exploration company plunged by more than 8%. Meanwhile, industry players are still scrambling to verify the truth behind this news.
A source familiar with the matter told the newspaper that the notice regarding the ban on imports of certain Australian goods was communicated verbally by Chinese authorities during a meeting held in recent weeks, and major traders have already begun moving forward with the process. According to the newspaper, at least one Chinese customs clearance company has already suspended customs procedures for these seven product categories.
Additionally, the South China Morning Post reported later that day that China may also impose an import ban on wheat from Australia, though the exact timing remains uncertain.
In 2020-21, China is expected to import 7.5 million tons of wheat, while Australia will produce 29 million tons and export around 18.5 million tons.
Broker Lorentzen & Stemoco noted in its latest report to clients today: "Although only 8% of Australian wheat is shipped to China, this will further disrupt the dry bulk shipping market."
As a result, this could lead to significant vessel congestion, forcing ships to divert to other markets.
In the first 10 months of this year, Russia's seaborne coal imports to China increased by 40% year-on-year. So far, Russia does not yet have the production capacity to fully offset Australia's coal supply shortfall. According to Braemar ACM, an Australian coal management company, this could lead to expanded long-haul trade from Canada and the U.S., as well as a rise in land-based coal shipments from Mongolia.
Foreign media speculate there are two main reasons: First, it’s tied to China’s COVID-19 prevention policies. Recently, China has detected the coronavirus in various imported goods from multiple countries. To rigorously prevent imported outbreaks, China has been forced to narrow the scope of its import regulations. The second reason, according to foreign media, is the current state of China-Australia relations—and Australia’s stance toward China. They suggest the latter is the primary factor driving this situation.
Australian government officials have given mixed reactions.
Australia's *Sydney Morning Herald* reported that Birmingham, head of Australia's Department of Trade, stated on the 3rd that he had already communicated with relevant industries and expressed concern over the content of the report. Birmingham subsequently warned that he might escalate the issue by appealing to the World Trade Organization.
Western Australia Premier Mark McGowan criticized the Australian government over the issue, stating that he had long warned the federal government about its misguided actions, which could lead to grave consequences for Australia.
On this Sino-Australian economic and trade issue, China has repeatedly emphasized: mutual respect is the foundation for cooperation.
On November 3, Chinese Foreign Ministry Spokesperson Wang Wenbin stated at the regular press conference that China's relevant agencies conduct inspections and quarantine of imported goods from abroad strictly in accordance with laws and regulations. China has always believed that a healthy and stable China-Australia relationship aligns with the fundamental interests of the people in both countries.
Wang Wenbin also pointed out that mutual respect is the foundation and guarantee for the two countries to engage in practical cooperation.