China has eased restrictions on Australian coal imports, but reviving the trade has proved to be a challenge. In March, coal imports were still a third of the 2016-2019 average due to bureaucratic issues and the worsening economics of the industry. Australian miners have found new customers and cheaper imports from Russia and Mongolia have taken market share in China. Relations between the two countries first soured in 2017 over concerns about China’s militarisation of islands and laws criminalising foreign interference. Trade curbs were imposed in 2020 in response to Australia calling for an inquiry into the origins of COVID-19, throttling roughly A$17bn of Australian imports.
Australian exports to China have surged despite the curbs, thanks in part to a booming iron ore trade. The restoration of unrestricted trade is a priority for the Australian government, with trade minister Don Farrell expected to visit Beijing soon. However, officials and exporters say competition and wariness about the longevity of diplomatic thaw will delay a quick return to pre-restriction trade levels. Australian producers have also said they will not prioritise China at the expense of newer clients. Tensions between the two countries remain, and Australia has urged exporters to diversify even as it works towards economic rapprochement.
