Beijing’s Australian Coal Ban Backfires; Units Face Blackouts

Beijing’s week-old ban imposed on Australian coal by Commerce Ministry backfired as the industrial parks are facing sudden blackouts resulting into non-fulfilment of the overseas orders thereby eating into its GDP growth.

While electricity is at a premium in the world’s second-largest economy and more than 80 Australian vessels with coal had been ‘held up’ off Chinese ports. These hold about 8.8 million tonnes but despite reports about individual ports granting entry to some ships most sit at sea waiting for a U-turn from Beijing on its coal ban, which ultimately is affecting the economy of China, reports Asia Times.

Frank Chen writing for Asia Times reported that sudden blackouts in industrial parks are raising speculation that Beijing’s ban on Australian coal imports is starting to backfire.

China is hauling Australia over the coals for its leading role in the Covid-19 blame against China as the origin of the pandemic, as well as Canberra’s’ policy to lockout Chinese tech giants such as Huawei from its 5G rollout.

The power shortage would eat into its GDP growth and industrial output after growth recovered back to positive territory in the third quarter, said an official with Shanghai’s Industry and Information Technology Commission who requested anonymity to Asia Times.

Manufacturers and exporters are searching for alternative power supplies to keep production lines running as overseas orders are piling up.

Exports from the economic powerhouse, whose GDP is on a par with those of Spain and Turkey, have bounced well above pre-Covid-19 levels, with October’s exports up 20 per cent year-on-year, reported Asia Times.

Many regions in China like Zhejiang, Jiangsu, Henan, Hubei, Hunan, Jiangxi, and Inner Mongolia are grappling with power shortages. Many small and medium businesses in the eastern Zhejiang province have reverted to work-from-home arrangements.

Moreover, it’s difficult for China to change its policy overnight regarding the import of coal from Australia.

“Power plants have in the past years retrofitted their equipment to use quality Australian coal but they cannot switch to domestic alternative overnight simply because comparable pure thermal coal is not easy to source,” noted one post on the blog. (ANI)