China's National Development and Reform Commission at a meeting with 10 Chinese power plants on Saturday and reported by state media on Monday, means Australian coal will be blocked indefinitely while China ramps up imports from Mongolia, Indonesia and Russian Federation, and expands local production.
Birmingham said on Tuesday that while the Australian government would work to "defend" the trade with China, it would also work with the Australian industry to diversify.
"In fact, it is the Australian side that has been politicising economic, investment and technological issues, and discriminating against Chinese companies in violation of market economy principles and worldwide trade rules", Mr Wang said.
"I urge Chinese authorities to immediately rule out these reports of what, if accurate, would appear to be the use of discriminatory practices against Australian coal", Trade Minister Simon Birmingham told media on Monday.
Trade tensions between Australia and China have intensified following months of disputes over cotton, timber, rock lobster, beef, wine and coal.
Why block coal imports at all?
However Mr Wang refuted Australia's stance that they are being unfairly targeted by China.
Australia's barley exports to China had been worth around US$1 billion a year before a recent drought.
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The preliminary seven-day statewide positivity for cases as a percent of total tests from December 7-13 is 8.7%. The province reached a record number of active cases at 10,039 and record number of hospitaliations with 359.
Citing China's goal of being carbon-neutral by 2060, Wang goes on to say that "an absence of Australian coal in China is actually beneficial to all other market suppliers".
Mr Birmingham told reporters on Wednesday the risk profile of trading and doing business with China had no doubt increased throughout the course of the year.
China also claims Australia has discriminated against Chinese companies - in violation of worldwide trade rules - by hampering their ability to invest in Australia.
Prime Minister Scott Morrison is demanding confirmation China has banned Australian coal, warning the world is closely watching the worsening trade dispute. "That can create a lot of uncertainty for many other trading partners".
Australia's thermal coal exports are expected to hold up relatively well because buyers were being found in South Korea, Vietnam and Japan, ANZ commodity strategists Daniel Hynes and Soni Kumari said in a research note.
As relations soured this year after Canberra proposed an independent investigation into the origins of the coronavirus pandemic, first reported in central China last year, Beijing in May imposed five years of anti-dumping and anti-subsidy duties totalling 80.5% on Australian barley - effectively stopping a billion-dollar trade in its tracks.
"It also has a knock-on effect in relation to others around the world".