Beijing's trade war with Australia spectacularly backfires as China is plagued by electricity woes plunging millions into darkness – after it refused delivery of $1billion of Aussie coal
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 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 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.
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.
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.
'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.
