China’s ban on Australian coal backfires spectacularly as electricity shortages worsen

Beijing’s brutal bullying tactics have hit Australian businesses hard – but it turns out the communist state is shooting itself in the foot.

China’s savage trade war with Australia has brought a string of industries to their knees – but now, it appears the feud has also spectacularly backfired for Beijing.

In recent weeks, the superpower has rolled out harsh restrictions on many Australian sectors, including wine, timber, barley and lobsters.

Aussie coal has also been unofficially banned since October, with steel mills and power companies apparently told to steer clear.

It has also emerged that more than 60 ships carrying thermal and coking coal are stuck off China’s coast, unable to unload almost $700 million worth of Australian goods.


Some have been in limbo for months, with the ABC reporting there were suggestions environmental quality problems were being blamed for the delay.

The brutal tactic has caused the price of Australia’s premium hard coking coal to plummet by 22 per cent since October, with Prime Minister Scott Morrison slamming the informal coal ban as a “breach of WTO rules” and “obviously in breach of our own free trade agreement”.

But it turns out the decision is also having serious consequences for the communist state.


According to The Australian, power shortages are increasing in China with millions of citizens resorting to rationing their heating over winter and avoiding using elevators.

“You cannot pretend that bad relations between China and Australia haven’t contributed to this situation,” a Chinese energy insider told the publication.

Last year, Australia supplied more than half of China’s thermal coal imports for power stations and more than 40 per cent of the nation’s imports of coking coal.

According to Garda World, the world’s largest privately owned security services company which offers business solutions, electricity shortages are expected to affect parts of Hunan, Jiangxi, and Zhejiang provinces until early February 2021.

That could lead to temporary commercial and communications disruptions, including mobile phones, as well as traffic disruptions caused by malfunctioning traffic signals and train delays due to impacted signalling devices or overhead wires.

Supply chains and essential services like ATMs and gas stations could also be disrupted, with officials ordering a number of factories to operate during non-peak hours only.

RELATED: Pay up: China’s Aussie bans backfire

Crew members of the bulk carrier Anastasia have been stuck aboard their ship for several months as a trade dispute between Australia and China over coal exports intensifies. Picture: Twitter/@AnnaKrien

Crew members of the bulk carrier Anastasia have been stuck aboard their ship for several months as a trade dispute between Australia and China over coal exports intensifies. Picture: Twitter/@AnnaKrienSource:Twitter


Earlier this month, the price of coking coal in China soared to a four-year high, with analysts from Chinese financial information portal Hexun Futures claiming the restrictions on Australian coal was a contributing factor.

As a result, China has had to buy coal from Canada, which is one of the few remaining viable options – and the lack of competition has almost immediately led to higher prices.

The South China Morning Post also reports that coal prices have “skyrocketed since October to a level not seen since May last year”, with a spokeswoman from China’s National Reform Development Commission stating that: “We have noticed coal prices have risen recently and that has caused widespread concern in society”.

The publication claimed import restrictions had helped to drive up the price of coal, with imports dropping 15 per cent in November off the back of restrictions on coal from Australia and Indonesia, according to Trading Economics analysis.


Speaking with earlier this month, Professor James Laurenceson, the director of the Australia-China Relations Institute at UTS, touched on the current predicament facing China and said the more restrictions that were imposed, the more Beijing risked hurting its own interest.

“For example, iron ore would hurt Australia the most, but if China hit that, it would shoot itself in the foot even more,” he said at the time.

As the war of words between the two nations heats up, attention is now turning to other Australian industries which could be next on China’s trade war hit list.

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