SHANGHAI: PRIME Minister Tony Abbott may believe coal is “good for humanity”, but China is taking the opposite view.
Official figures released on Tuesday showed the volume of coal imports fell 31.3 per cent over the first eight months of the year, as China’s overall trade for August declined more than expected.
China’s decline in coal imports and usage is being partly driven by the slowing economy, but equally by a switch to cleaner fuels.
The figures, from the Customs Bureau, show China’s imports of liquefied natural gas (LNG) were up 14.8 per cent in volume over the first eight months of the year. This suggests China is moving away from coal and towards gas as plunging oil prices make such a decision far cheaper.
China’s overall coal consumption was down 5 per cent in the first five months of the year. Australian LNG producers look to be benefiting from China’s switch, even if they are being forced to accept lower prices.
A separate report from the Customs Bureau, released late last month, shows China bought 4.28 billion yuan ($966 million) worth of LNG from Australia over the first six months of the year. Though this is still small compared with iron ore and coal, the value of Australian LNG exports to China rose 125 per cent over the first half, even as oil prices collapsed.
Agriculture a big growth area
The other big growth area is agriculture. The value of Australian wheat exports to China was up 45 per cent over the first six months of the year, and wool was up 10 per cent.
That ranked wheat third behind coal and iron in terms of exports to China, with wool a close fourth.
These gains in LNG, wool and wheat will not make up for lost federal government revenue from coal and iron ore exports, but they show the transition that is under way in China.
The data shows the world’s second biggest economy is demanding more food and clean fuel, but less coal and fewer cars, and iron ore volumes are broadly flat.
For the first eight months of the year, China’s cereal crop imports were up 85 per cent and car imports were down 26 per cent.