Following market concerns over a reported China ban on coal imports from Australia, fears that Australian cotton may become the latest casualty amid the China-Australia trade tension surfaced over the weekend.

Unsurprisingly, Western media outlets, without official clarification on any of these market rumors, have been rife with speculation that China may be waging a "shadow trade war" against Australia. Such speculation may be aimed at accusing China of "economic coercion," but the underlying reason for its existence may be rooted in the deteriorating China-Australia relationship that has been on a downward spiral due to the hostile attitude and attacks launched by the Morrison government against China.

To a certain extent, it is market anxiety and concerns over the politicization of economic issues that have fueled fears that China may hit certain Australian exports, but the root of all this is that Australia has thrown bilateral relations into a vicious cycle by destroying the foundation of mutual trust. No matter what move China makes at this sensitive moment, the market will be inclined to see it as part of a trade war or confrontation strategy. It is abnormal and pathological to see how the almost overwhelming tendency of interpreting government policies, market dynamics and even rumors from a negative view have dominated public opinions.

Some Western media outlets have raised the China-Australia trade uncertainty to the level of a "shadow trade war," even though there is no solid evidence to support it. In the absence of official confirmation, it seems questionable whether the so-called Chinese market sources quoted by some Australian media are reliable or not, and it is also dubious to what extent such individual sources could represent the true will of the Chinese government or domestic industry associations.

It is true that China did announce tariffs on Australian barley and initiate an anti-dumping investigation into Australian wine imports in recent months, but the irony is that little attention has been paid to the fact that the Australian side has also launched anti-dumping probes on Chinese aluminum, steel and A4 paper this year. 

There is little media coverage on the fact that the number of trade investigations and penalties taken by Australia on Chinese products far exceeds those of China trade remedies against Australia over the years. Of course, Western media do not care for these insignificant facts and details when fueling the hostility between the two countries, both politically and economically.

Speculation about a ban on coal or cotton imports will have little impact on the Chinese economy, but it will hurt local economy in Australia. It is conceivable that if the "shadow trade war" theory really takes root, the market will continuously find new areas to focus its attention, sparking new casualties amid China-Australia tensions.

China has no intention of initiating a trade war with any country, and neither does it have any responsibility or obligation to clarify rumors that have been hyped up by Western media. 

It is essentially useless to clarify rumors that will surface one after another under the current circumstances. Maybe the only way to allay fears of a "shadow trade war" is to prevent bilateral relations from further deteriorating.