[War & Business] China's Coal Crisis

The view of a coal mine in Huaibei City, Anhui Province, China [Image source=AP·Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] As the coal shortage in China deepens, concerns are growing that a power crisis and a heating crisis will occur simultaneously ahead of the winter season. In China, where the dependence on thermal power generation still exceeds 60%, voices are emerging that the government's premature restrictions on coal use have become the root cause.

Although coal is generally known to have been first used in Britain with the advent of the steam engine in the 18th century, the country that actually first used coal worldwide is China. It is said that coal has been used for heating and cooking since the late Tang Dynasty in the 9th century, meaning it has been a major fuel for over 1,200 years.

In Marco Polo's 13th-century "The Travels of Marco Polo," it is recorded that "in China, black stones mined from mountain veins are burned like firewood, and wood is not used as fuel." Already in the medieval era, with a population exceeding 100 million, the forests around major cities in China had almost disappeared due to urban expansion and heating fuel, leading to a very high dependence on coal.

Currently, China remains the world's largest coal importer, consuming more than 60% of the world's coal. Compared to other countries, environmental regulations have not been strict, and coal for thermal power generation and heating is still widely used in underdeveloped regions within China such as Heilongjiang Province in the Northeast, Inner Mongolia, and the Xinjiang Uygur Autonomous Region.

The Chinese government's restrictions on coal use began at the end of last year when imports of Australian coal were limited. Until 2019, China imported more than 60% of its coal from Australia. Australian coal is a high-calorie coal capable of producing over 5,500 kcal per kilogram, making it essential for thermal power generation.

However, due to escalating trade frictions and diplomatic disputes with Australia, the Chinese government cut off imports of Australian coal as a retaliatory trade measure. Since then, a coal crisis for power generation had already been predicted. The Chinese government massively imported low-efficiency coal from Indonesia and Mongolia, which produce only 3,000 to 4,000 kcal per kilogram, causing a significant drop in power generation efficiency. As the power shortage worsened, the Chinese government began indiscriminately purchasing oil and natural gas. Consequently, the prices of major energy sources, already suffering supply and demand issues due to COVID-19, began to skyrocket.

Despite this, China continues to criticize Australia as "America's hunting dog" and is not actively engaging in negotiations to resume coal imports. The world is watching with concern as the Chinese government, under the pretext of protecting national pride, is pushing hundreds of millions of its citizens into the cold.

This content was produced with the assistance of AI translation services.