The current Russia-Ukraine crisis is compelling China to distance itself
Data from the National Bureau of Statistics (NBS) revealed China’s raw coal output posted fast growth in the first two months of 2022, while imports continued to decline. The raw coal output rose 10.3 per cent year on year to 690 million tonnes from January-February.
Signs of tapered trade apparent
President Xi’s net zero pledge last year led to power outages sending the country into a mad rush to supply electricity using coal. The growth rate was 3.1 percentage points higher than that of December 2021. It imported 35.39 million tonnes of coal in the first two months, down 14 per cent year on year, NBS’ data showed. In essence, the republic resumed stockpiling to ensure sufficient domestic supply – crystallising the question on China’s sincerity about net zero goals.
However, China has a bigger issue to deal with; pressure from countries to step up and urge Russia to cease fire. Its best defence is the Treaty of Good-Neighborliness and Friendly Cooperation Between the People’s Republic of China and the Russian Federation (FCT). Signed by both Jiang Zemin and Vladimir Putin, it is a 20-year strategic treaty which was extended for another 5 years in February 2022.
A string of trade deals including a 30-year gas supply contract from Russia to China through a new pipeline was also signed in February 2022. China’s trade with Russia rose to US$146.9 billion in 2021, according to Chinese customs data. Although up 36 per cent year-on-year, that figure still remains only about a tenth of the volume of the China’s combined trade with the US and EU.
China’s frantic stockpile may carry another plausible objective. Signs of tapered trade have appeared through Chinese buyers’ and their respective lenders’ shunning Russian shipments of coal, liquefied natural gas (LNG) as well as crude. The country may be trying to reach a position of having enough inventory to sustain itself; to corroborate its neutral stance for future conflicts. It remains to be seen if China will succeed in this mission. On the climate goal conundrum, it is clear as day China put it in the backburner.
Marine Online News Team
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