Because they realize the economy is about to collapse and they want to blame china for it?
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Chinese Economics Thread
- Thread starter Norfolk
- Start date
I think there are doing it now because they are under the most extreme threat and they want to reduce risks. It’s part of the Grey Rhino/Black Swan strategy to reduce risks.
As for raw material prices, it is china that is driving these prices down right now, so these effects will become deflationary soon. Iron ore is now around $80-$90 a ton, down from ~$220. Same is happening with Coal, and presumably also other commodities.
Additionally, China is encouraging buyers to enter into 100% long-term contracts so they will not be exposed to short term price movements in spot markets as they are now, reducing future inflation.
Thermal coal burned in China for power and heat generation was nearly all mined in China. Production fell down because China closed a lot of smaller and less reliable coal mines. First it was to attempt to reduce coal miner deaths, later it was to attempt to curb air pollution, they went so far it resulted in the shortages. It was a combination of mine closures and colder weather than usual.
Most of the coal China imported from Australia was high quality anthracite coal used to make steel. There are alternatives in Mongolia, North Korea, and Russia. China massively increased its imports of coal from Mongolia and Russia and new rail infrastructure is being built to transport coal, like I said before in this thread. In Russia the coal transport to China saturated the BAM railroad in Siberia which previously was severely underused for example. In Mongolia a lot of the coal is being transported by truck but a railroad is being built and should be ready in a couple of years. The Mongolian railroad is supposed to cut coal transportation costs to a quarter of what they are now.
Most of the coal China imported from Australia was high quality anthracite coal used to make steel. There are alternatives in Mongolia, North Korea, and Russia. China massively increased its imports of coal from Mongolia and Russia and new rail infrastructure is being built to transport coal, like I said before in this thread. In Russia the coal transport to China saturated the BAM railroad in Siberia which previously was severely underused for example. In Mongolia a lot of the coal is being transported by truck but a railroad is being built and should be ready in a couple of years. The Mongolian railroad is supposed to cut coal transportation costs to a quarter of what they are now.
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The main reason China wants to transition away from coal is to reduce air pollution. We all remember how polluted Chinese cities were a decade ago (and some still are today). Most of this was apparently because of coal.
So China, especially starting from 2017, started creating targets to limit coal usage. Now, eventually China realized that reducing coal usage also reduces carbon emissions - and the European Union loves it when carbon emissions are reduced. Thus, to look better to Europeans, China changed the objective from reducing coal emissions to reducing "carbon" emissions. Which are the same thing.
Now of course this winter the reduction targets overreached. But the carbon emissions targets are there for a very important reason. It's not to make Europeans happy, although that's a nice side effect. It's to get rid of coal, so Chinese cities can have blue skies and air that doesn't smell like industrial waste.
So China, especially starting from 2017, started creating targets to limit coal usage. Now, eventually China realized that reducing coal usage also reduces carbon emissions - and the European Union loves it when carbon emissions are reduced. Thus, to look better to Europeans, China changed the objective from reducing coal emissions to reducing "carbon" emissions. Which are the same thing.
Now of course this winter the reduction targets overreached. But the carbon emissions targets are there for a very important reason. It's not to make Europeans happy, although that's a nice side effect. It's to get rid of coal, so Chinese cities can have blue skies and air that doesn't smell like industrial waste.
If the US can actually stop selling coal to vietnam.
In4ser
Junior Member
Inflation is at a 30-year high in the US. While nominally, it's only at 6.2%, which isn't that bad compared to some countries, it is a complete shock to many Americans (i.e. millennials or younger) who haven't experienced inflation levels this high before. Simply put, it's at a level where you cannot maintain the same lifestyle without also increasing your income/salary growth to match the levels of inflation. This means that many if not most Americans are going to have to change their personal consumer behavior if they want to stay in the black.
If I were your cousin, I'd advise him to try to find a job elsewhere in the US as the cost of living in California is ridiculously high. Even if he were to make . I understand, he might be trying to get by staying with his parents but any money he saves or earns is immediately wasted on higher taxes and expenses just by living in that state.
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In4ser
Junior Member
It also has the side effect of making natural gas more expensive for Americans and Europeans as a subtle middle finger to their self-righteousness attitude. Natural gas prices are estimated to be 30% more expensive this year in the USA partially due to higher demand from China.
antiterror13
Brigadier
feel sorry for Aussies miners ...but not the govt though
Don't. They vote for the government.
Australia's media blitz ( Murdoch media spearheaded) is focused on trying to project China's power shortage as due to ban on Australian Coal. If they are importing Coking coal and not thermal coal then how can Australia insist that the shortage is due to the ban ?
Also, wouldn't the administration in China be aware of energy demands ( annual and seasonal) while placing the ban? The media is yet again engaging in a "China collapse and CCP bad" ritual. And then the public wonder why China doesn't fall face first.
