Can Russia and Mongolia Replace Australia’s Coal Supply to China

Since the beginning of the pandemic, China has faced several unexpected challenges. The trade spat with Australia, the continued South China Sea shipping congestion, and a shortage of coal supply are testing the country’s economic capabilities and problem-solving skills. China has stepped up its efforts to engage Russia, Mongolia, and other third parties to fill their coal shortage.

Exactly a year ago, in October 2020, Chinese state-owned companies were ordered to stop the import of Australian coal, widely viewed as retaliation for Australia’s more critical stance on China. The restrictions on Australian coal naturally pose a new opportunity for other parties in the region, particularly in East Asia and Northeast Asia, to fill China’s coal shortfall.

But apparently it wasn’t enough. In June 2021, Chinese factories began to report power outages and electricity shortages. The Lantou Group’s September 28 report showed the provinces with the most severe power consumption problems to include Xinjiang, Qinghai, Yunnan, Jiangsu, Fujian, Guangxi, and Guangdong, where China’s major manufacturing companies are located.

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