(Staff article from the ABC NEWS Australia on 19 December 2020)
In China, the prospect of resource scarcity is largely
thought to be a thing of the past. But this month, power outages have returned
to some parts of the country, conjuring memories of China's old command
economy, where resource rationing was a part of daily life.
Chinese social media has seen tens of thousands of posts complaining about the new electricity restrictions in the country's central and eastern provinces of Hunan and Zhejiang, which have been viewed more than 150 million times on the platform Weibo. News of the restrictions comes amid a burgeoning trade spat between Australia and China, in which Australian coal appears to have effectively been barred from Chinese ports.
By November,
more than 60 vessels carrying Australian thermal coal were held up in Chinese
waters because they weren't able to offload their cargo, according to Bloomberg
shipping analysis data. So do China's recent energy woes have anything to do
with its sanctions on Australia, or is it just an awkward coincidence? What's
happened?
Residents of
Hunan and Zhejiang have been issued notices stipulating the "orderly use
of electricity", along with other power restrictions that haven't been
seen for a long time, according to local media reports.
The restrictions
have come during a particularly cold Chinese winter, where millions of people
have switched on energy-intensive heating to cope with sub-zero temperatures. Temperatures
in Zhejiang plummet around this time of year, with daily average lows of 3
degrees Celsius in December — in January, the mercury usually doesn't rise
above 8 degrees.
According to
China's state-owned broadcaster CCTV, lights and lifts in some office buildings
were shut off in a several cities across Hunan and Zhejiang. The power outages
forced some office workers in Hunan's city of Changsha to climb 20 to 30 flights
of stairs, according to a report in the local news publication iFeng.
Social media
users in the city of Yiwu in Zhejiang made similar complaints. "The office
room is freezing cold after the aircon is turned off … Now the lift is shut off,"
one resident wrote on Weibo. "[Climbing stairs] almost killed me this
morning." Changsha residents have also been advised against using
energy-intensive appliances such as electric stoves and ovens, and not to set
air conditioners above 20 degrees.
The ABC has also
seen an online notice to a middle school in Zhejiang, banning staff and
students from turning on heating if temperatures exceeded 3 degrees. Do we know
what's causing the power pinch?
In Hunan,
authorities said the province of more than 67 million people had reached the
electricity grid's maximum load, with a predicted gap of 3 million to 4 million
kilowatts of energy during winter's peak period, according to local media.
"This
year's situation is quite special. One is that winter comes earlier and the
weather is relatively cold," a spokesperson for Changsha's Development and
Reform Commission told China's Cover News this week. "Then our coal supply
in Hunan Province is also insufficient. For various reasons, the power supply
is now relatively tight."
This was again
stated by a spokesperson for the Changsha Power Supply Company, who said
Hunan's power pinch was partly due to the cold, and partly due to a drop in
energy production capacity.
Wu Donglin said
the latter comprised of "the reduction of coal burning, the decline of
reservoir water levels, and the inability of wind power to generate
electricity" because of freezing temperatures.
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| Chairman Xi personally banned Aussie Coal to punish Australia. |
The threat from within: China has pledged to become carbon-neutral by 2060, responding to the need to drastically bring down its overwhelming share of global carbon emissions. Experts say it's also critical for the communist party's survival.
Mr Wu's comments
came after an editorial published in the state-owned Global Times tabloid
claimed Beijing was preparing to let power producers import coal from several
countries without restrictions, "except for Australia".
China's coal
imports on the whole have been on a downward trajectory according to official
Government statistics — in other words, it's not just Australian coal that has been
having trouble entering China's market.
"In
November, 11.67 million tonnes of coal were imported, a decrease of 2.06
million tonnes from the previous month, and a year-on-year decrease of 43.8 per
cent," a statement from the National Bureau of Statistics read on Tuesday.
"From January to November, 260 million tonnes of coal were imported, a
year-on-year decrease of 10.8 per cent." While coal makes up the lion's
share of China's energy mix, it has been on a minor downward trajectory in
recent years as Beijing begins a transition to clean energy.
So is the ban on
Australian coal to blame? Shane Oliver, AMP Capital's chief economist, told the
ABC it was quite possible that the power cuts had a link to the coal ban, but
that it was impossible to know for sure.
"The
disruption to the supply of coal into China as a result of the bans on
Australia may also be playing a role in that and causing rationing," he
said. "It is quite normal to have cold winters at this time of the year in
China, so one would assume that's been allowed for."
However he said
it was premature to assume China's trade tactics against Australia had
backfired. "I think all countries which engage in trade wars tend to pay
some price for it," Dr Oliver said.
"Trade wars
are not desirable, they do result in both sides losing: obviously one side
loses because they don't get the supply and quality of supply that they're used
to, the other side loses because they lose an export market."
Jun Mao, a
thermal coal analyst at Jiangsu Jinying Capital Management, told the ABC the
power shortages were a sign of supply and demand issues in China. "China's
thermal coal stocks are insufficient and the price is relatively high. But it
hasn't been completely out of control," he said. "The Chinese
Government is already coordinating, and I think the problem will be resolved
soon."
Mr Mao said he
believed the power shortages had "some connection" to China's ban on
Australian thermal coal, but that it was "not the main reason". "It
is also related to some domestic factors, which have impacted on the shortage
of thermal coal," he said.
Hu Xijin, editor
of the Global Times, wrote on social media that it was "nonsense" to
link China's power shortage to the ban on Australian coal. He said the ban had
a "subtle impact" on China's electricity supply, because "the
coal imported from Australia is mainly coking coal and China has rich resources
of thermal coal". "The claim that the Australia policy hurts
ourselves is a malicious fabrication by foreign forces and some people in our
country," Mr Hu wrote.
How much energy
does China use? While the country is the largest consumer and investor in
renewable energy, it is also by far the largest consumer of coal on the planet.
This makes it the world's largest emitter of greenhouse gases, while also being
a renewables superpower committed to being carbon neutral by 2060.
But coal is
still largely responsible for keeping the lights on across China, where energy
consumption has skyrocketed in recent years. Data from the International Energy
Agency showed that in 2018, China consumed more than 6,800 terawatt hours of
energy, which eclipsed the total energy consumption for all of North America in
that year. On Wednesday, a spokesperson for China's National Development and
Reform Commission said China's year-on-year electricity consumption increased
by 9.4 per cent last month.
How much
Australian coal has China sanctioned? China isn't dependent on Australian coal
for its energy — that being said, Australian coal has been a part of China's energy
mix for several decades now.
Australian coal
exports comprise two varieties: thermal coal, which is burnt for electricity,
and metallurgical coal, which is used for making steel and iron ore. Last year,
18 per cent of all Australian thermal coal exports were sent to China, with a
value of $4 billion, while total coal exports were worth $13.7 billion.
The slowdown in
Australian coal exports to China began to emerge in September, with ships
carrying Australian coal barred from offloading their cargo at Chinese ports. This
month, no ships carrying thermal coal from Newcastle — Australia's busiest coal
port — have left for China, and none are scheduled to leave before Christmas.
Ground to a halt:
Normally one in five coal ships leaving the Port of Newcastle are bound for
China. The latest shipping schedule reveals that number is now zero. As this
trade appears to have been effectively cut off by China, it joins an
ever-growing list of Chinese sanctions against Australian imports amid a
worsening geopolitical stoush.
Beijing laid
some of its issues with Canberra officially in November, delivering a list of
14 "grievances" that noted Australia's "anti-China"
government-funded research at the Australian Strategic Policy Institute (ASPI),
"interference" in China's internal affairs regarding Hong Kong,
Taiwan and Xinjiang, and ban of Huawei from the construction of Australia's 5G
network.
Alongside trade,
Australian diplomats and ministers have had their contacts with Chinese
officials frozen, and Australian calls for a dialogue with China have been left
unanswered.
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| Stranded bulk carriers waiting in China for months to unload Aussie coal. |
More than 60 Australian coal-carrying ships kept waiting to unload
More than 60
ships carrying Australian coal have been stranded at sea – some for months –
while waiting to enter Chinese ports, according to analysts, with the Morrison
government being urged to clarify the long delays.
Dozens of
vessels are being kept waiting, according to the global commodity and energy
price reporting agency Argus, which has been tracking the situation. An Argus
representative told Guardian Australia some of those vessels left Australia as
long ago as May and many had been waiting in Chinese waters since September.
Beijing appeared
to be “singling out Australian coking coal imports”, Argus said, with 86% of
the coking coal waiting outside the Chinese ports of Jingtang and Caofeidian
coming from Australia.
The details come
after Bloomberg reported 66 vessels loaded with Australian coal were positioned
in Chinese waters, including 53 that had been waiting about four weeks or
longer to offload the material at China’s ports.
The Guardian has
identified several bulk carriers anchored off the Chinese coast which left the
Queensland ports of Hay Point, Gladstone and Abbott Point months ago for the
two- to three-week journey. Few other nearby ships, which have not come from
Australia, had been anchored for longer than a month. The ships are sailing
under the flags of numerous countries, including China. One of them, the Jag
Anand, left Gladstone on 26 May and has barely moved in recent weeks.
The developments raise concern that Australian coal may have been targeted as part of a range of trade actions taken by Beijing over the course of this year, amid tensions in the diplomatic relationship.
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| Chinese communists are thugs with no respect for international laws. |