Confronted with the headwinds from the trade war in recent weeks, other long-term Chinese structural economic reform projects have also slowed down, such as the attempt to reduce the heavy debts accrued by local governments and companies.
Government stimulus has flowed back into the system, with plans for big infrastructure projects, and state banks have been told to lend, lend, lend to private companies, in particular.
Jobs have always been Beijing’s priority because they equate to social stability. So the long-term effort to phase out dirty coal and unprofitable steel making may have also hit the pause button in favour of local job creation.
Over winter, curbs on coal mining were reportedly relaxed, a departure from recent years when strict environmental curfews stopped coal activity and steel making for months to ensure clean air during the heating season.
Energy analyst Wood Mackenzie says a long-term ban on Australian coking coal would have «enormous implications for both countries,» and this is why it probably won’t happen.
The prices Chinese steel mills would have to pay for coal would spike, and they would be forced to use lower-quality Mongolian coking coal.
«The possibility of adverse impacts on China suggests a long term ban is unlikely,» says Wood Mackenzie’s research director Robin Griffith.
At a Senate Estimates hearing on Thursday evening, just hours after the Australian dollar had fallen on the news that Dalian – just one of China’s ports – had banned Australian coal imports, DFAT secretary Frances Adamson said domestic Chinese concerns were the most likely explanation.
A former China ambassador, Adamson said it was her experience that «China is a big place, there are a lot of complex issues that they are seeking to manage with a population of 1.4 billion people –environmental issues, customs issues, all sorts of things, food safety.
«Often the explanation is a relatively straightforward one».
A similar slow-down of coal imports was experienced at Chinese ports last year, which hit a range of countries not just Australia.
After it ended, Australian sales rose.
Kirsty Needham is China Correspondent for The Sydney Morning Herald and The Age.