China faces massive power shortage amid Australian coal ban
Amid tension between Beijing & Canberra, China is facing power cuts due to a ban on Australian coal
Multiple cities in China have been facing power cuts in recent weeks in the aftermath of Beijing's decision to ban coal imports from Australia.
China's National Development and Reform Commission's decision to indefinitely block coal imports from Australia has triggered a shortage of fuel in the country due to which various cities are experiencing power outages, including Zhuhai, Shenzhen, Zhongshan, and Guangzhou.
In a number of provinces, local governments have imposed restrictions on power usage, asking agencies to cut electricity supply as the growing demand for energy is colliding with a shortage of thermal coal. For instance, China's central and eastern provinces of Hunan and Zhejiang have introduced new electricity restrictions, demanding citizens to ensure orderly use of electricity.
While China is scrambling to revive its economy and industrial development, the winter season has also heightened local demand for electricity.
The growing diplomatic spat between Beijing and Canberra is hampering their government's efforts to recover from the economic repercussions of COVID-19. According to a Bloomberg report in November 2020, more than 60 ships carrying thermal coal from Australia have been stranded at sea as they are waiting to enter Beijing ports for offloading amid tensions between the two countries.
China’s Foreign Ministry spokesperson Zhao Lijian defended the energy embargo by stating that Australia's imported coal did not meet Beijing's environmental protection standards. This development came even as China's latest generation of coal power plants have been relying on high-quality Australian coal for several years now.
In 2019, around 18 percent of Australia's total thermal coal exports with a value of $4 billion were sent to China. However, as tensions between Canberra and Beijing escalated, China's coal imports from Australia declined by 47 percent in October 2020 in comparison with the same period the previous year. Responding to China's coal ban imports, Australian Prime Minister Scott Morrison stated that it would breach the rules of the World Trade Organization (WTO). The Australian government also reportedly urged Beijing to resume talks in order to improve the deteriorating diplomatic ties.
China and Australia have been facing conjunction of trade, defense, and foreign policy disputes, which escalated after Scott Morrison-led government called for an inquiry into the origin of Coronavirus, that emerged from China's Wuhan city. In response, China imposed several restrictions and tariffs on the import of Australian products.
In 2018, Canberra blocked Chinese tech giant Huawei Technologies Co. from building its 5G network in Australia, citing national security grounds. In addition, Australia also barred at least 10 Chinese investment deals across various sectors in the country including agriculture, infrastructure, and animal husbandry.
Source:
https://www.ft.com/content/e83fffeb-3ef2-4b67-8989-6d17f153d8d4
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