China “Suffers Worst Power Blackouts in a Decade” After Banning Australian Coal

China “Suffers Worst Power Blackouts in a Decade” After Banning Australian Coal

Just weeks after banning Australian coal imports, China faces a nationwide power crisis. Amid large scale outages, Beijing is resorting to electricity rationing for households and businesses not seen in years, media reports confirm.

“China suffers worst power blackouts in a decade,” the South China Morning Post reported on Wednesday. “Provinces across China are struggling with blackouts, as authorities use restrictions to curb energy use and manage supply,” the Hong Kong-based newspaper added.

“Power rationing in China sends chills through economy,” Japanese business daily The Nikkei confirmed. The power crisis is “threatening to throw a wrench into Beijing’s plans to rapidly revive the world’s second-largest economy from a coronavirus-induced slumber,” the newspaper noted.

The Chinese power sector is heavily depended on the coal imports from Australian. In 2019, around 60 percent of China’s thermal coal imports, the type used in electricity generation, came from Australia. Coal provides up to 70 percent of China’s energy needs.

China is also the world’s biggest polluter, emitting more carbon dioxide than the United States and the European Union combined.

The coal ban is part of Beijing’s escalating trade war with Australia to punish the U.S. ally for standing up to China in the wake of the Wuhan coronavirus pandemic.

Australian newspaper The Sydney Morning Herald reported how the coal ban backfired on China:

The street lights and billboards are being turned off in its major cities; factories are being shut down or forced into reduced shifts; office lighting and lifts have had their power cut off; consumers have been told not to use electric stoves and to turn off their heating until the temperature falls below three degrees Celsius.

The ban on Australian coal has coincided with a rapid uptick in China’s economy as it emerges from the pandemic and with particularly cold weather, which would normally result in a surge in demand for energy coal and in coal prices.

China imports of coal from Australia are dominated by the metallurgical coal used in steel-making. Only about 30 per cent of the coal exported to China is energy coal and it represents only a fraction of the largely-domestic coal China uses for power generation – overall it imports less than 10 per cent of its needs. (…)

While the Chinese authorities are keen to downplay any link between the ban on Australian coal and the power shortages now being experienced, there is a very transparent signal – a price signal – of the impact the ban is having.

As a result of the ban, China’s power companies are scrambling to secure alternate supply, with imports from Indonesia, Russia and South Africa rising sharply. So, too, has the price of their coal.

Communist China is determined to make its treatment of Australia an example to any country daring to defy it on the world stage, media reports suggest. “Beijing’s use of trade as political payback against Canberra is seen as showing the consequences of opposing China’s interests,” The South China Morning Post noted on December 5.

Australia is among the few countries to demand an international inquiry into the outbreak of the coronavirus in the central Chinese province of Wuhan. In April, Australian Prime Minister Scott Morrison demanded “an independent assessment of how this all occurred, so we can learn the lessons and prevent it from happening again.”

Beijing responded by threatening a boycott of Australian goods and followed it up by slapping punitive tariffs on key imports from the country.

China is equally angered by Australia’s participation in a new Asia-Pacific strategic alliance promoted by U.S. President Donald Trump. The U.S.-led Quadrilateral Security Dialogue initiative, or the Quad, is a four-nation coalition made up of the U.S., Australia, Japan, and India which aims to create a framework for security cooperation, including joint defense exercises and access to each others’ military and naval bases.

China, which has a history of invading and threatening its neighbors, has been rattled by the emerging alliance. In October, Chinese Foreign Minister Wang Yi called the Quad a “huge security risk,” as Beijing expands its military footprint in the Asia Pacific.

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