China is struggling with Australia over coals and cottons. China is taking a series of 'retaliation measures' against Australia after Australia began seeking support from European leaders for an investigation into China’s response to the pandemic.
Chinese authorities have recently taken steps to virtually halt imports of Australian beef, wine, barley, and recently coal. Now Chinese government is reportedly targeting Australian cotton as well as the target of retaliation according to South China Morning Post.
Australia’s economy is now under heavy pressure of lockdowns in the country’s second-largest city with its international border closed. According to WSJ, Australia is experiencing its first recession in 28 years. Australia has experience in avoiding global financial crisis hit a dozen years ago thanks in part to China’s stimulus efforts on its infrastructure expenditures which needed Australian iron ore and other minerals to build bridges and skyscrapers.
For the past decade, China has been Australia's largest trading partner and now accounts for 32.6% of its exports. China selected Australia as strategic partner over its rival Brazil for importing Australia's mines such as iron ore, coal and gas which fueled China's growth. Australia is preferred for their quality and geographic proximity. The deal benefits both nations.
China has already delayed Australia’s iron ore custom clearance in April due to conflict with Australia over the issue of the COVID-19 virus. Commodity experts predict that it will be difficult for China to impose additional import sanctions on Australian iron ore since 60 percent of China’s mining is imported from Australia. There will be sharp rise in iron ore prices if China continues to ban imports of Australian iron ore.
Source
https://www.wsj.com/articles/china-sentences-australian-to-death-as-bilateral-relations-fray-11592045994
https://www.wsj.com/articles/australia-worries-coal-is-chinas-next-target-as-ties-fray-11602665386
https://www.wsj.com/articles/chinas-economic-squeeze-on-australia-extends-to-cotton-11602839413
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