Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Coal crisis reveals how energy supply has become a major problem for China

Coal crisis reveals how energy supply has become a major problem for China

Access to energy has become one of China’s major foreign policy considerations and recent events show why – it simply doesn’t have sufficient resources of its own to power what has become the world’s largest industrial hub.
The headlines have been stark in recent days: regions of China have been suffering from power shortages, with local governments being forced to ration electricity due to a lack of coal and increased demand pushing prices up.

The crisis is also a product of a power system fuelled by government subsidies that operate on a not-for-profit basis, alleviating the pressure on bill payers. This means that when commodity prices surge, they start making massive losses and so have to cut supply.

The problem shines a light on one of China’s biggest headaches – ensuring there is enough affordable power for a mega-industrial nation of more than 1.4 billion people, with demand soaring year after year as the country has grown.

And so the need for energy has become one of the biggest strategic motivations behind China’s contemporary foreign policy, stretching across the Belt and Road Initiative, the South China Sea disputes, and even the alarming, if improbable, scenario of a potential conflict with the United States, which has initiated a policy of maritime encirclement around China’s periphery, most aptly demonstrated by the new AUKUS deal with Australia and the United Kingdom.

Access to and supply of energy is one of the most important considerations in international strategy. Energy essentially functions as the nervous system for all elements of a country – without it there is no industry, no transport, no military and minimal ability for a society to function.

Without access to a means of generating electricity or attaining oil, a country is to all intents and purposes living in the Middle Ages. In the modern world, access to a stable, invulnerable supply of energy resources can be the difference between winning and losing a war.

In World War II, for example, one of the reasons Britain was able to hold out was because it was self-sufficient in coal reserves, and with the US on the western flank of the Atlantic, it was not cut off from oil imports either. In contrast, Nazi Germany, the continental-based enemy, was in a geographically vulnerable position and had all but lost the war once the Soviet Union overran the European oilfields of Hungary and Romania, crippling its war machine. ‘Energy security’ is an important criterion of a country’s strategic strength and power projection.

China is not blessed with many advantages in this domain. It has the world’s largest population and even though it has its own oil reserves, these do not satisfy domestic demand. And a pressing concern has been that the bulk of its energy imports – whether coal or oil – are imported via its maritime periphery, which is increasingly vulnerable as it is surrounded by hostile states.

As referenced in declassified documents from the Trump administration on America’s Indo-Pacific Strategy, the US’ objective in a conflict scenario would be to prevent China dominating the first and second island chains, which would amount to an attempt at maritime containment.

The current coal crisis illustrates squarely why this is a huge strategic vulnerability for China, because you can imagine what would happen if that supply of coal – or even oil – was completely cut off. Beijing has long been planning a contingency for this potential scenario, and this is why it has focused on alternative transcontinental routes through the Belt and Road Initiative, including in Pakistan, Myanmar, Laos, Thailand, Russia and Kazakhstan. It also explains why China is strengthening its military grip over the South China Sea, which contains abundant oil reserves, as well as doubling down on nuclear power and renewable energy patents. In a nutshell, China hopes to diversify its energy routes, and also become more energy independent. Beijing sees this as critical.

But the coal crisis reveals the extent of the work that is yet to be done. Despite China’s pledges to reduce carbon emissions, its heavy industries and power stations continue to be dependent on coal. More than that, enormous amounts of it are being imported from the US, too. China has banned coal from Australia as part of its ongoing dispute with Canberra, which some might argue has hardly helped in the current crisis.

Now Beijing has commanded all coal mines within the country to maximize their output in order to drive down the price with increased supply, and is also accelerating imports. It seems obvious from these policies that climate considerations will be sacrificed in the short term because of fears of a negative impact on economic growth in the long term.

On the other hand, China could simply raise electricity bills to offset the rise in commodity prices as opposed to cutting production – yet that itself is a strain on the economy. The country’s power bills continue to be significantly cheaper than the likes of Britain, where all the infrastructure is privately owned and run for profit.

In conclusion, it is clear that energy continues to be one of China’s potential weaknesses – a product of the country’s demographic and geographic realities. The coal crisis has arrived at a timely moment, with the US and its allies stepping up the potential military threat to the country, intensifying the urgency for China to find its way out of relying on the world’s signature fossil fuel and address the challenge of satisfying the growing power needs of the world’s biggest industrial hub.

It won’t be easy for sure, but how it handles these issues will help define how it offsets the challenge posed by the US – and that’s why energy has become one of the country’s biggest foreign policy considerations.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Bruce Willis Relocated Due to Advanced Dementia
French and Korean Nuclear Majors Clash As EU Launches Foreign Subsidy Probe
EU Stands Firm on Digital Rules as Trump Warns of Retaliation
Getting Ready for the 3rd Time in Its History, Germany Approves Voluntary Military Service for Teenagers
Denmark Confronts U.S. Diplomat Over Covert Trump-Linked Influence in Greenland
Trump Demands RICO Charges Against George Soros and Son for Funding Violent Protests
Taylor Swift Announces Engagement to NFL Star Travis Kelce
France May Need IMF Bailout, Warns Finance Minister
After the Shock of Defeat, Iranians Yearn for Change
Ukraine Finally Allows Young Men Aged Eighteen to Twenty-Two to Leave the Country
The Porn Remains, Privacy Disappears: How Britain Broke the Internet in Ten Days
YouTube Altered Content by Artificial Intelligence – Without Permission
Ukrainian Refugee Iryna Zarutska Fled War To US, Stabbed To Death
Elon Musk Sues Apple and OpenAI Over Alleged App Store Monopoly
German Chancellor Friedrich Merz: “The Current Welfare State Can No Longer Be Financed”
HSBC Switzerland Ends Relationships with Over 1,000 Clients from Saudi Arabia, Lebanon, Qatar, and Egypt
Sharia Law Made Legally Binding in Austria Despite Warnings Over 'Incompatible' Values
Dutch Foreign Minister Resigns Amid Deadlock Over Israel Sanctions
Trump and Allies Send Messages of Support to Ukraine on Independence Day Amid Ongoing Conflict
China Reels as Telegram Chat Group Shares Hidden-Camera Footage of Women and Children
MotoGP Cameraman Narrowly Avoids Pedro Acosta Crash at Hungarian Grand Prix
Wizz Air passengers screamed as storm-battered flight diverts to Bologna
European postal services halt U.S. deliveries after Trump imposes new tariffs
Urban explorer finds abandoned luxury restaurant left to decay
Fidesz leader labels Péter Magyar a ‘bluffer’ amid escalating political spat
French rope park operator arrested for denying entry to Israeli children
Újpest thrashes Zalaegerszeg 4-1 to secure first win in five matches
Profit-margin cap costs retailers 13 billion forints a month, warns trade group
Curiosity rover finds coral-like rock on Mars hinting at watery past
U.S. green policy rollback drives investors to Europe’s sustainable finance market
Special funerals rise in Hungary: boat, aerial and forest burials gain popularity
Hungary’s Kiskunság region turning into semi-desert after extreme drought
Kopasz Bálint wins world kayak 1000 m title in Milan, making him triple world champion
Budapest’s Keleti railway station to close for four weeks for track overhaul
Balaton could be unfit for swimming by 2035 and dry by 2050, scientists warn
Leaked guidelines show Meta’s AI allowed flirty and racist interactions with children
Filming of ‘Emily in Paris’ halted after assistant director dies on set
Filipino guest workers sue after Hungary moves to deport them for pregnancy
Ukraine Declares De Facto War on Hungary and Slovakia with Terror Drone Strikes on Their Gas Lifeline
A monster hit and a billion-dollar toy empire
Animated K-pop Musical ‘KPop Demon Hunters’ Becomes Netflix’s Most-Watched Original Animated Film
Canada: Nurse Suspended and Fined 93 Thousand Dollars After Stating the World’s Most Well-Known Fact Since the Creation of Adam and Eve, That There Are Only Two Genders
Elon Musk tweeted, “Europe is dying”
Far-Right Activist Convicted of Incitement Changes Gender and Demands: "Send Me to a Women’s Prison" | The Storm in Germany
Hungary Criticizes Ukraine: "Violating Our Sovereignty"
Will this be the first country to return to negative interest rates?
U.S. Treasury Secretary Whitney Bessent Backs Stablecoins to Boost Treasury Demand
Spain to Declare Disaster Zones After Massive Wildfires
Three-Minute Battery Swap Touted as Future of EVs
Beijing Military Parade to Showcase Weapons Advances
×