Labor fears humanitarian crisis on Australian coal ships stranded off China | Australian foreign policy

Australian exporters face another “grim” year driven by tensions with China while a standoff over more than 70 ships stranded with Australian coal on board threatens to cause an international humanitarian crisis, the opposition has said.

While warning of the mounting economic costs to Australia, the shadow trade minister, Madeleine King, called on the Morrison government to take a step towards repairing the relationship by pledging to “eradicate deeply offensive anti-China rhetoric” from some backbench MPs.

The government says it is pressing China to resolve delays in clearing Australian coal and it has also raised fears about the welfare of seafarers who have been stuck on the ships for months.

But in the latest blow to Australian coal exports to China, which are worth $14bn a year, the Australian newspaper reported on Thursday that Beijing had told the owners of nearly 8m tonnes of Australian coal aboard 73 waiting ships to find new buyers because the cargo will not be unloaded in China.

Australian coal companies are generally paid when the product leaves Australia, so it is up to the buyers to try to find a new home for the coal that has already been shipped. However, there may be ramifications for Australian coal companies with the standoff undermining certainty in the trade with China.

Exports from Queensland’s four big coal ports were down by 10% in December compared to the same time in the previous year, according to data compiled by investment bank UBS.

The ports – Abbot Point, Gladstone, Hay Point and Dalrymple Bay – generally operated well below capacity all year, pushing total coal shipped last year down to levels last seen in 2017.

The trade minister, Dan Tehan, said the Australian government had made a number of representations to the Chinese government on the delay in processing Australian coal, the most recent being on Wednesday.

“The Chinese government is aware of our concerns in relation to the delays in processing Australian coal and the welfare of the crew on vessels carrying Australian coal,” Tehan said in a statement.

“We continue to monitor the situation closely.”

Tehan said the current impasse involved “private commercial arrangements” and Australia was urging “all parties to reach a resolution as soon as possible”.

King said she was “enormously worried” about the coal standoff and, more broadly, the apparent lack of a plan to recover Australia’s economic relationship with its largest trading partner.

“The most immediate people caught up in that is the 1,500-odd seafarers caught on ships that hold Australian coal that was sold to China and is now looking for another home,” the opposition trade spokesperson told Guardian Australia.

“I fear that there’s a humanitarian crisis brewing off the coast of China. Given the number of nationalities involved in the seafaring industry, this becomes an international problem if this stalemate isn’t resolved.”

King said if the government was not able to get the China relationship on a better footing soon “there are grim consequences for our economy”.

“If we miss out on the new wave of Chinese growth … we will be missing out on growth to our future prosperity.”

King acknowledged the situation was difficult in light of Australian ministers being unable to secure phone calls with their Chinese counterparts, and she backed the government on national security issues – such as clamping down on foreign interference and blocking Chinese telco Huawei from the 5G network.

But she said the Coalition could signal the importance it placed on the relationship by reining in anti-China rhetoric from a number of its backbenchers.

Miner Whitehaven Coal said on Thursday that as a result of the ban on Australian thermal coal China was instead using domestically produced coal and more expensive Russian, Indonesian and South African coal.

“China’s restrictions have altered seaborne coal trade flows where, instead of being delivered to China, Australian coal is now finding customers in alternate destinations including India, Pakistan and the Middle East, and traded coal historically delivered into these markets is finding its way into China,” the company said in a trading update.

It said prices for thermal coal, which is used in producing electricity, had been propped up by interruptions to supply and booming demand from the rest of Asia.

However, prices for the higher value metallurgical coal, which is used in steel production, “remain weak in the absence of Chinese buyers”, Whitehaven said.

Whitehaven gets only about 2% of its revenue from sales to China, analysts at Macquarie Group said in a note to clients.

Thermal coal prices in China were about US$20 a tonne higher than elsewhere in December as a result of the ban, the analysts said.

Chris Richardson, a partner at Deloitte Access Economics, said the trade tensions had, in many ways, “hurt China much more than it’s hurt us”.

“That doesn’t mean there’s going to be any short-term solution, but at some stage China would have to count the cost to its own citizens,” Richardson said.

The treasurer, Josh Frydenberg, acknowledged it was a “challenging time” in the relationship but argued Australia had been a “very reliable, trusted long-term partner for China” in supplying “very high quality” coal.

Frydenberg also defended the blocking of a $300m bid by the state-owned China State Construction Engineering Corporation to take over Australian building company Probuild, after China’s embassy accused Australia of “weaponising the concept of national security to block Chinese investment”.

Such moves, the embassy said, were “detrimental to mutual trust as well as bilateral economic and trade relations”.

Frydenberg said Australia’s national interest “always comes first”. Over the last six months, he said, about 20% of approved foreign investment applications included at least one Chinese party.

“That means more than 250 Chinese-related foreign investment applications have been approved,” he said. “Less than a handful have not proceeded.”