Srinagar, Jammu and Kashmir Feb 3, 2021 (Issuewire.com) - As Xi Jinping vows to make China, the climate leader and carbon neutral by 2060, the country still draws 70 percent of its power from fossil fuels, primarily coal. In addition, these coal energy projects have only stimulated the already virus-hit economy. It is no surprise that Xi is wrestling with its internal economy and external trade, but the virus has hit Chinese employment and environment severely too. However, the recent skirmishes with Australia have deteriorated the economy further. The two countries have been at odds ever since Morrison called for an independent inquiry into the origin of the Covid-19 pandemic that emerged in the mainland. In response, the Chinese authorities retaliated with imposed tariffs on Australian products.
Many cities in China have been hit by a power outage as Beijing banned coal imports from Australia due to its acute shortage. Even the economic engines of the country like Shenzhen, Dongguan, Guangzhouare facing power shortages.
In three provinces of China, the situation has gotten out of the control of the authorities as they had to impose strict restrictions to limit the use of electricity. In Hunan province, power agencies are directed to cut electricity use by turning off the street lights at night to tighten the power supply. In Changsa, office workers have to climb 20 flights of stairs to reach their workplace as the buildings have shut down the elevators to save electricity. These hardships are faced by the local citizens while the state offices function without any interruptions.
Yiwu, known for its light industrial trade is highly affected by the government’s energy restriction policy. Aggravating by the day, the factories are mandated to cut 20-30 percent product incapacity under any circumstance. Moreover, authorities have banned the heating system in trading centers.
With electricity exceeding the grid capacity, the authorities further ordered residents to ration energy. Timings are strictly constrained, every day between 10.30 a.m. to 12 p.m. and 4.30 p.m. to 8.30 p.m. most building billboards will remain shut and offices will have no electricity during the weekend. Even the residents cannot even use electric stoves, geysers, and ovens.
In Jiangxi, authorities have set up hours in which energy use will be limited. Manufacturers who are still struggling to get back on their feet after the economy at a halt during the pandemic have been ordering to take three days off for every day they work.
The Chinese authorities are taking to strict enforcement of regulations to an extent that if they don’t comply with authority they will completely cut off their electricity. And if the residents turn heating before 12 a.m., they will receive an RMB 400 Yuan fine.
While the sudden blackout has left citizens in severe cold, stringent enforcement has indicated an in-depth structural problem in China. In a nutshell, it can be said that these dire times are revealing how the authorities’ plans for the economy do not fit the existing power market. The roughening up of ties with Australia only made things worse in all respects.
The fact that the Chinese government has denied that the potential shortage of coal has nothing to do with its spat with Australia has turned into an energy trade war with China banning imports of coal with its major suppliers.
China has ramped up another big trade war blocking Australian imports of $4 billion, which will adversely impact the Chinese economy. Chinese authorities seem to deliberately escalate their feud with Australia amid the pandemic and consequent economic slump globally by putting trade amounting it $235 billion annually, at significant risk.
As China heavily relies on Australia for high-quality coal to power its latest generation power plants, Australia alone supplied more than 40 percent of China’s coking coal and 57 percent of the nation’s thermal coal. Many coal power plants in China heavily depend on Australian coal due to its higher efficiency and now scramble to find alternative suppliers. Even the coastal areas of China are heavily reliant on Australian coal.
A ban on coal and sudden mandated blackouts are being experienced in cities of China, causing immense inconvenience to the inhabitants. The authorities are not taking responsibility, nor has any project on power generation that seems to be in the pipeline for the Chinese Government. China must realize that the more restrictions it imposes, the more country risks hurting its own interests. Since Australian coal is the key energy to China’s energy due to its quality and fewer emissions it is the best option for China in order to fulfill its carbon-neutral mission,
China’s actions have proven to be inconsistent with the spirit of a free trade agreement with Australia through its ban. China has breached the international trade rule portraying a bad outcome for trading relationships. China surely appears oblivious to the potential ramifications of the trade war on other trading partners across the globe, thereby, creating a lot of uncertainty as they are also dependent on Chinese business especially disrupting the livelihood of people domestically.
Import restrictions will certainly harm China because Australian coal is 1.5 times more efficient in terms of energy production than any other including China’s own domestic coal. That means it will be a daunting task for China to reach the same level of energy as China will anyhow end up using more coal from other sources, thus generating higher emissions.
If China wants to curb its coal consumption it needs to ensure that there are other more sustainable methods to fuel power, and also needs to maintain healthy relationships with other countries. Insufficient electricity production at a local level and ineffective efforts to limit energy consumption to meet the party's political mission signal a looming larger problem.
China’s ambition to decarbonize the economy by 2060 by switching to renewable sources of energy has already shown its seasonal colors. Its aim to cut carbon has let many use fuel for electric generation releasing higher carbon emissions. China’s carbon neutral policy is definitely akin to the famous Chinese idiom of taking off one’s pants to fart or to do something unnecessary. Thus, opting for Australian coal to fuel its economy will be a positive outcome, otherwise, a ban on Aussie coal will prove to cause a real dent in China’s economy, severely hindering its economic growth without alleviating public inconvenience.
Wing Cdr. (retd) Sahil Mishra. Sahil is a retired Air force officer. He is a National Defense academy alumni and completed his Air force training in Hyderabad getting commissioned as a fighter pilot. He took charge of ground duty after a decade long experience of flying MiG's. He has worked in varied fields of work in IAF since then like, Personnel Management, Procurement, and Training. He has pursued and completed post-graduation in English Honors and now writing keeps him busy post-retirement.
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