'Not sensible': Scott Morrison delivers stern warning to China

Prime Minister Scott Morrison has delivered a stern warning to China that his government will not relent to Beijing’s demands as steps are taken to resurrect their struggling relationship.

Mr Morrison addressed reporters on Tuesday in Tasmania and was pressed on reports in Chinese state media that China has placed a ban on Australian coal in a politically-motivated move.

The prime minister downplayed the impact such a move would have on the industry while stressing to China he would not yield under pressure as his government seeks to save bilateral ties through dialogue with Beijing.

"Let me be clear about something. Those discussions happen without condition,” he said.

“They don't happen subject to Australia getting rid of a free press. They don't happen with Australia giving away our rules regarding who can invest in Australia. I mean, that wouldn't be sensible at all."

It has been widely publicised Trade Minister Simon Birmingham has failed to contact his Chinese counterparts as he seeks answers to what appears increasingly like trade sanctions as punishment for Australia’s vocal stance on several Chinese matters.

Chinese officials have repeatedly called for sizeable concessions if Beijing is willing to play ball and engage in constructive dialogue to repair the damaged relations.

China’s Deputy Head of Mission in Australia Wang Xining said earlier this month China was seeking “concrete actions” if they are to engage with Australia.

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Days later the federal government passed legislation allowing it to veto state-level dealings with foreign entities, a move widely believed to have been triggered by Victoria’s Belt and Road Initiative deal with China and one that will only enrage the Communist Party of China further.

Mr Morrison has repeatedly stressed Australia will not sacrifice its values over several matters including Hong Kong, Xinjiang and perceived diplomatic coercion from China.

Last month China’s embassy handed Nine Newspapers a list of 14 grievances Beijing has with Canberra.

China not Australia’s biggest coal customer, PM says

The prime minister said the Chinese state-owned media reports suggesting Australian coal had been banned had not yet been confirmed by the government in Beijing.

"If that were the case, then that would obviously be in breach of WTO [World Trade Organisation] rules, it would be obviously in breach of our free trade agreement, and so we would hope that is certainly not the case."

Mr Morrison said a Chinese ban on Australian coal would be a lose-lose for both countries.

However, he noted India and Japan were also large buyers of Australian coal, meaning the industry had a "diverse customer base".

Trade Minister Simon Birmingham is deeply troubled by the reports.

Dozens of ships carrying Australian coal have been stranded off the coast of China for months due to supposed environmental problems.

Australia’s coal exports to China are worth roughly $14 billion a year.

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