Millions of Chinese residents have been left without heating in the middle of winter as cities ration electricity amid a blockade on Australian coal.
Australia provided 57 per cent of China‘s thermal coal imports in 2019, which is used to generate electricity in power stations.
But last month, Beijing blocked Australian coal imports, which has resulted in 80 ships carrying more than $1.1billion in blacklisted cargo being stranded off the Chinese coast.
Chinese coal prices were 500 yuan ($100) last month but increased 760 yuan ($153) per tonne on Wednesday, which has now resulted in restrictions on power use for millions of residents, according to South China Morning Post.
Some 80 Australian ships carrying more than $1.1billion in blacklisted cargo are being stranded on the Chinese Coast, which has caused domestic coal prices to skyrocket in China
Smoke rises from chimneys at a power plant in Lixin County in Bozhou, Anhui Province of China. Australia provided 57 per cent of China’s thermal coal imports in 2019, which is used to generate electricity in power stations
Some 57 million people live in Zhejiang province, south of Shanghai, on China’s east coast, and have been besieged by power shortages resulting in electricity being shut off.
The Zhejiang provincial government has now ordered offices to only use heating when the temperature drops below 3C and restaurant to only use air conditioning for diners, rather than staff, in the city of Wenzhou from December 11 to 20.
Small to medium sized factories have reportedly been ordered to halt production for one to two days after operating for two days between December 13 and 30.
Meanwhile in Hunan province, which is home to 67 million people, some residents have reportedly been forced to climb 20 flights of stairs after apartment power cut off and shut down the lifts, according to The Australian.
A Chinese energy industry source told the newspaper: ‘You cannot pretend that bad relations between China and Australia haven’t contributed to this situation.’
Even in global financial hub Shanghai, which has a population of 24 million, the municipal government has ordered shopping malls and office towers to turn off air condition and non-essential outdoor lighting.
The city’s iconic light and laser show along the Huangpu River will reportedly be shut down indefinitely in the coming days.
China’s President Xi Jinping. Beijing blacklisted Australian coal imports last month as part of an ongoing trade war between the countries
China’s economic planning agency, the National Reform Development Commission, said there is enough coal to last through winter and spring despite increasing prices, according to the Post.
The Ordos Coal Trading Centre blamed skyrocketing coal prices on the ban on Australian imports.
‘Right now, there are more than 80 Australian cargo ships, carrying 8.8 million tonnes of coal,’ the coal trading and service provider said in a research note obtained by the Post.
‘But under the current circumstances, in the short term, they will not be allowing in Australian coal, but rather will depend on [supply] from the domestic market.’
It comes after a Chinese government spokesperson denied knowing Australian coal exports worth $14billion have effectively been banned in the communist nation.
Mr Wang Wenbin (pictured) from China’s foreign ministry said on Tuesday he was ‘not aware’ of any ban on Australian coal
A meeting on Saturday between China‘s major power companies and the nation’s top economic planning agency agreed to lift restrictions on coal imports from all countries except Australia, Chinese media reported.
Australia’s total export markets in 2019
1. China: $135 billion (33% of total Australian exports)
2. Japan: $36 billion (9%)
3. South Korea: $21 billion (5%)
4. United Kingdom: $16 billion (3.8%)
5. United States: $15 billion (3.7%)
In the first official comments from the Asian nation about the meeting, foreign ministry spokesperson Wang Wenbin said he was ‘not aware’ of the ban and accused Australia of casting itself as a ‘victim’.
Prime Minister Scott Morrison has said the ban would be a lose-lose for both countries and a clear breach of World Trade Organisation rules, as well as the China-Australia free trade agreement.
He also emphasised it would force China to buy dirtier coal from other countries, putting its climate change ambitions at risk.
While there has been no formal notification of the ban, the spokesman for the Chinese foreign ministry did not deny it was in place.
Mr Wang said everything China did was legal and in the interests of its consumers and companies and Australia was ‘pointing an accusing finger at China.’
‘This move is meant to confound the public and we will never accept it,’ Mr Wang told a press conference in Beijing on Tuesday evening.
Australia’s resources minister Keith Pitt said Australia expected all its trading partners to play by the rules.
‘We are doing our part,’ Mr Pitt said on Wednesday.
The Australian coal export industry to china is worth $14billion a year (pictured: Newcastle port)
‘Australia has not moved in terms of the free trade agreements and we continue to meet what we said we would do. But we expect all of our exporters to have a level playing field, be treated fairly and that is what we are looking for.’
Coal is Australia’s second biggest export industry, with the nation exporting $14billion worth a year to China.
Relations between China and Australia have rapidly deteriorated since Prime Minister Scott Morrison called for an inquiry into the origins of coronavirus which was identified last year in the Chinese city of Wuhan before spreading around the world.
More industries are concerned if they will be next on the chopping block as the Chinese Communist Party continues to punish Canberra for speaking out on its human rights record.
Beijing’s decision to slap tariffs on Aussie wine and barley and block several other exports including wood, coal and seafood has badly affected some producers.
How China’s feud with Australia has escalated
2019: Australian intelligence services conclude that China was responsible for a cyber-attack on Australia’s parliament and three largest political parties in the run-up to a May election.
April 2020: Australian PM Scott Morrison begins canvassing his fellow world leaders for an inquiry into the origins of the coronavirus pandemic. Britain and France are initially reluctant but more than 100 countries eventually back an investigation.
April 15: Morrison is one of the few leaders to voice sympathy with Donald Trump’s criticisms of the World Health Organization, which the US president accuses of bias towards China.
April 21: China’s embassy accuses Australian foreign minister Peter Dutton of ‘ignorance and bigotry’ and ‘parroting what those Americans have asserted’ after he called for China to be more transparent about the outbreak.
April 23: Australia’s agriculture minister David Littleproud calls for G20 nations to campaign against the ‘wet markets’ which are common in China and linked to the earliest coronavirus cases.
April 26: Chinese ambassador Cheng Jingye hints at a boycott of Australian wine and beef and says tourists and students might avoid Australia ‘while it’s not so friendly to China’. Canberra dismisses the threat and warns Beijing against ‘economic coercion’.
May 11: China suspends beef imports from four of Australia’s largest meat processors. These account for more than a third of Australia’s $1.1billion beef exports to China.
May 18: The World Health Organization backs a partial investigation into the pandemic, but China says it is a ‘joke’ for Australia to claim credit. The same day, China imposes an 80 per cent tariff on Australian barley. Australia says it may challenge this at the WTO.
May 21: China announces new rules for iron ore imports which could allow Australian imports – usually worth $41billion per year – to be singled out for extra bureaucratic checks.
June 5: Beijing warns tourists against travelling to Australia, alleging racism and violence against the Chinese in connection with Covid-19.
June 9: China’s Ministry of Education warns students to think carefully about studying in Australia, similarly citing alleged racist incidents.
June 19: Australia says it is under cyber-attack from a foreign state which government sources say is believed to be China. The attack has been targeting industry, schools, hospitals and government officials, Morrison says.
July 9: Australia suspends extradition treaty with Hong Kong and offers to extend the visas of 10,000 Hong Kongers who are already in Australia over China’s national security law which effectively bans protest.
August 18: China launches 12-month anti-dumping investigation into wines imported from Australia in a major threat to the $6billion industry.
August 26: Prime Minster Scott Morrison announces he will legislate to stop states and territories signing deals with foreign powers that go against Australia’s foreign policy. Analysts said it is aimed at China.
October 13: Trade Minister Simon Birmingham says he’s investigating reports that Chinese customs officials have informally told state-owned steelmakers and power plants to stop Aussie coal, leaving it in ships off-shore.
November 2: Agriculture Minister David Littleproud reveals China is holding up Aussie lobster imports by checking them for minerals.
November 3: Barley, sugar, red wine, logs, coal, lobster and copper imports from Australia unofficially banned under a directive from the government, according to reports.
November 18: China releases bizarre dossier of 14 grievances with Australia.
November 27: Australian coal exports to China have dropped 96 per cent in the first three weeks of November as 82 ships laden with 8.8million tonnes of coal are left floating off Chinese ports where they have been denied entry.
November 28: Beijing imposed a 212 per cent tariff on Australia’s $1.2 billion wine exports, claiming they were being ‘dumped’ or sold at below-cost. The claim is denied by both Australia and Chinese importers.
November 30: Chinese foreign ministry spokesman Lijian Zhao posted a doctored image showing a grinning Australian soldier holding a knife to the throat of an Afghan child. The move outraged Australians .
December 12: Australian coal is added to a Chinese blacklist.
Extraordinary twist as China’s trade war with Australia backfires with our biggest money-spinning export iron ore now set to stay at record levels for longer and earn the nation BILLIONS in extra revenue
By Stephen Johnson, Economics Reporter for Daily Mail Australia
China‘s trade war against Australia is failing with the federal government expecting iron ore prices to stay at elevated levels for longer.
The spot price of iron ore, the commodity used to make steel, this month climbed above $US150 ($A200) for the first time in seven years.
Despite trade sanctions against Australian wine and barley, China has continued to need even more iron ore to feed its infrastructure and apartment building.
Since June, iron ore prices have climbed steadily from $US80, with China sourcing 60 per cent of its iron ore from Australia as Brazil struggles to meet demand.
In the October budget, Treasury expected the commodity price to drop back to $55 a metric tonne by the end of June 2021.
China’s trade war with Australia is failing. Treasury’s Mid-Year Economic and Fiscal Outlook is expecting iron ore prices to stay higher for longer
Treasury is now expecting that lower price to be reached later in September next year with government economists notoriously conservative about commodity prices, a key source of government royalties.
Iron ore prices are so high the China Iron and Steel Association had a whinge about it with BHP mining executives.
China bought $70billion worth of iron ore during the last financial year, making it by far Australia’s biggest export among the $150billionworth of goods and services sold to the Communist power.
Federal Treasury’s Mid-Year Economic and Fiscal Outlook, released on Thursday, also forecast a slightly smaller budget deficit of $197.7billion for 2020-21 down from a $213.7billion deficit forecast in October.
As a proportion of economy, the deficit will shrink from 11 per cent of gross domestic product to 9.9 per cent, which is still the deepest sea of red ink since World War II.
Treasury said the smaller budget deficit was ‘primarily reflecting the faster-than-expected rebound in the economy’.
Australia’s unemployment rate fell back to a three-month low of 6.8 per cent in November, down from seven per cent in October, the Australian Bureau of Statistics revealed on Thursday.
Despite trade sanctions against Australian wine and barley, China has continued to need even more iron ore to feed its infrastructure and apartment building. Pictured is Chinese President Xi Jinping
Treasury was earlier this year fearing a jobless rate of ten per cent, as a result of the coronavirus shutdowns, but is now expecting it to peak at 7.5 per cent by June next year, even after JobKeeper wage subsidies end and JobSeeker unemployment benefits fall back to $565.70 without the coronavirus supplement.
In more good news, Australian household wealth reached new record highs in the September quarter thanks to a recovery in house prices and stronger superannuation balances.
Average household wealth rose by $6,850, or 1.6 per cent in just three months, to $441,649, a CommSec analysis of ABS data showed.
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