Concern over Aussie coal exports to China

The Chinese government is reportedly warning state-owned power plants not to buy new shipments of Australian thermal coal and instead favour domestic products.

Deputy Prime Minister McCormack said Trade Minister Simon Birmingham and diplomats were attempting to fix the issue.

"Of course we're very concerned by it," Mr McCormack told the ABC on Friday.

"But we have a two-way relationship with China. China needs Australia as much as Australia needs China and we want to make sure that whatever we do is in a careful and considered way."

China cooling on Australian coal could signal the latest escalation in trade tensions between the two nations.

Coal exports faced delays at Chinese ports last year.

Beijing has slapped a prohibitive 80 per cent tariff on Australian barley, while four major abattoirs have been banned from sending red meat to China.

Senator Birmingham is being ignored by his Chinese counterpart.

Home Affairs Minister Peter Dutton said the stonewalling was part of China's tactics.

"We don't think they've got a legal basis for imposing these tariffs and we want them to change their position," he told the Nine Network.

He said Australia would stand firm in its values after a push for global coronavirus inquiry stung China.

Labor leader Anthony Albanese said the government should explain why contact lines had broken down.

"We simply can't afford the job losses that would result from the sort of incidents that we're seeing with barley," he told reporters in Sydney.

"But if it spreads to other industries as well, that clearly is not in Australia's interests, so the government needs to always stand up for our own national interests."

Thermal coal, which is used to generate power, is one of Australia's top-three exports to China.

In 2018/19, China took $63 billion of Australian iron ore and $14 billion worth of coal.

China has announced new supervising rules for iron ore, with opinion divided on its impact for Australian exporters.

Senator Birmingham is hopeful the changes could speed up the entry of iron ore into China through fewer batches being checked.

"Early indications of talking to the industry are indeed that this would provide an opportunity for benefits both to China and to Australia," he said.

But the Global Times - considered a media voice of the Chinese government - has warned Australian iron ore imports could be hurt by political tensions between the two countries.

"This is another implicit warning to Australia," Yu Lei, a chief research fellow at Liaocheng University, told the newspaper.

"It is associated with how Australia has acted, and a general decline in demand for steel on the global level."

Australian Associated Press