It is exceptionally bad for the entire world economy that China’s growing energy crisis is so big that its GDP growth rate has now been written down. As with COVID, when China sneezes, the world gets a cold.
China’s state media say that 20 out of 31 provincial jurisdictions have implemented electricity-rationing measures since mid September this year.
In 2019 China obtained 96% of its coal from Australia.
Then China banned coal from Australia. Ships full of the stuff tooled around off China’s coast.
Now seven months after the unofficial ban China are running out, and with running out of coal goes running out of electricity production. Total coal inventory at China’s major power-generation groups is just 11.31 million tonnes – enough to meet demand for only about two weeks.
According to some commentators this year, coal was supposedly passe in China. Not so.
Maybe, just maybe, coal diplomacy is more useful and effective than military and nuclear submarine diplomacy.
But all that coal that used to go to China is now going more to other markets such as Indonesia and India.
It is a particularly dark moment for the world that the best diplomatic leverage Australia has with China is with a key mineral that is destroying the planet.
Whether or not Australia uses coal supply as a diplomatic play in the next weeks will be particularly important to the degree of tension remaining between the two countries that New Zealand relies the most on for pretty much everything.
With rolling blackouts now common in China, this modern cold war just got colder in tens of millions of Chinese households.
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