At this critical time, China is undergoing one of the coldest winters in at least 50 years. On top of that, people are having to cope with these freezing conditions while the coal supply is running out. Worst of all, to save face, the communist regime would rather see the Chinese people freeze to death than remedy the scarce coal supply — a crisis of their own making.
The ruling Communist Party is likely to face the public’s wrath as has been indicated by top international relations experts. This is a direct consequence of the Chinese Communist Party’s (CCP’s) ongoing trade standoff with Australia over coal imports.
The Communist Party is defiant in its stand and is not bothered in the slightest by the unnecessary winter hardships imposed on its citizens and industries. This issue is not only about a bilateral issue brewing between China and Australia. This is more about the Chinese Communist Party (CCP) flexing its political muscle and sending out a “tough guy” message to other countries.
To save face, the CCP will destroy everything in its path
Through this standoff, Beijing wants to show the world it will not tolerate anything against its own interests. It does not matter whether the people are destroyed in the process.
Officially, the CCP has laughably stated that it is taking a firm stand on this issue for the wellbeing of its people. However, that is far from the reality. Chinese people urgently need a supply of coal to survive and cope with the harsh winter. The situation in this rarely seen type of winter is a matter of life and death.
Xi Jinping, the Chinese president, is keen on pushing ahead with the disastrous trade dispute. As it is, he and his peers in the Party are completely oblivious and indifferent to the dire perils facing the people.
Chinese people are furious with the government’s stance, and unrest is growing in various parts of the country. However, the CCP is not likely to come to its senses and change its stance anytime soon. If required, it has warned that it will deploy force to eradicate any dissent.
The coal deficit is not only making life miserable for the citizens alone — Chinese industries are also on the receiving end of this crisis. Many factories have no other option left than to use low-quality domestic coal. Steel factories have been hit the hardest as they rely mostly on Australian hard coking coal.
Factories are having to make use of low-quality, costly coal. This is leading to significant pollution, making things even tougher for the local people. However, polluting the environment is not a concern for the CCP. The steel quality may also become inferior from using low-quality coal, warn the experts. Another option they have is importing coal from Mongolia, Canada, and Russia at an even higher cost.
Australia continues to prosper
As the Chinese government remains defiant in its stand, the effect on Australia has not been too adverse — so far. Since China stopped buying coal from it, Australia has found new buyers in India and Japan. So its coal profit margins have soared.
Wood Mackenzie’s principal analyst Rory Simington thinks the situation is crazy. It is not only about the coal issue that the Chinese government is under pressure. The unofficial Chinese ban on copper imports from Australia may make things tougher for the Communist Party as well. The country is having trouble in getting copper from Peru — a key producer.
The coking coal shortage may eventually compel China to modify its stance. The Chinese coke ovens are built for use with high-quality coking coal. They do not cope well with semi-soft coking coals derived from Mongolia and other places. So the Chinese regime’s stringent economic measures may cause severe damage to the country’s structural integrity.
It is hard to predict where this cold war between these two nations will lead to, but the possibility of the U.S. playing a pivotal role in breaking the ice is there. Now that the Biden administration is taking charge at the White House, the U.S. may come to the rescue of its long-time ally Australia.
How far the idea of forming a strategic alliance of Western countries to counter Chinese coercive moves gets implemented (as was planned by the outgoing Trump administration) remains to be seen.
There is no contest here. The eventual winners of this coal war will be Australia and, above all, the Chinese people. Australia has many friends and allies around the world. Australian products and services are top class, and they have never had to resort to bullying or coercing anyone to buy anything from them. They do not like bullies. The robust Australian economy is built upon Australians going out into the world and making friends and delivering consistent, top-quality products.