China and Australia have become embroiled in a deepening political spat that is spilling over into trade. Even with some Chinese cities suffering power blackouts in December, the Beijing authorities continued to block coal shipments from Australia, underlining their determination. Miners aren’t the only exporters Down Under finding it harder to access their biggest market as tensions ramp up, nor is Australia alone in feeling heat. Other countries that have clashed with China, including Canada, the U.K. and India, have joined Australia in boosting cooperation and intelligence sharing, while the incoming U.S. president has promised a more united front against Beijing.
1. What’s the China-Australia spat about?
Ties have been on a downward spiral since 2018 when Australia, accusing China of meddling in its domestic affairs, passed a new law against foreign interference and espionage. It also barred Huawei Technologies Co. from building the country’s 5G mobile network, among the first countries to do so, citing national security. The atmosphere worsened in April after Prime Minister Scott Morrison’s government called for an international inquiry into the origins of the coronavirus that causes Covid-19. Then in November a Chinese Foreign Ministry spokesman tweeted an edited image of an Australian soldier holding a knife to the throat of an Afghan child — a barbed reference to an ongoing war crimes probe. At a time when Chinese “wolf warrior” diplomats are getting increasingly combative, Morrison’s demand for an apology was rebuffed.