Arbitror:

Latin for "I witness."

Arbitror turns a critical lens onto the world’s leading governments with the mission of keeping those governments accountable to their citizens and promoting sound policy worldwide

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China's Coal Ban: A Breath of Fresh Air

China's Coal Ban: A Breath of Fresh Air

For China, North Korea can be considered a necessary evil that must be tolerated. Shared Communist ideology aside, China has a lot to lose if North Korea implodes—an influx of refugees, a reunification of the Korean peninsula, and American troops just across the Yalu River. Although they are allies on paper, the two countries have a complex relationship; Beijing’s patience appears to be wearing thin.

On February 19, the Chinese government announced that it would stop importing North Korean coal until 2018. This came two days after Kim Jong-nam, Kim Jong-un’s half-brother, was assassinated in Kuala Lumpur. This is significant not only because the assassins used VX, a nerve agent classified by the UN as a weapon of mass destruction, but also because the Chinese government provided Jong-nam with protection and financial assistance when he lived in Beijing. The coal ban also came a week after North Korea test-fired an intermediate-range ballistic missile, which received worldwide condemnation. It seems that the coal ban is a sign that China is sick of Kim’s games.

As one of North Korea’s few allies and a major trading partner, China can rein in North Korea if it so chooses. Exports make up 5.9% of North Korea’s GDP, and China buys 85% of those exports. Coal makes up one-third of North Korea’s exports. If China follows through, its coal ban will show North Korea that it means business, cutting funding for weapons development while not crippling the North Korean economy to an irreparable extent.

The timing of this announcement could not have been any better for China. First, China was able to punish North Korea for two things, the missile test and the assassination, in one fell swoop. This allowed China to maintain an image of strength while minimizing damage to North Korea. Second, U.S. President Donald Trump has criticized China in the past for not taking a tougher stance on North Korea. The coal ban shows that China is doing its part and puts pressure on the U.S. to have talks with the North Koreans.

Before the ban, North Korea was China’s largest supplier of anthracite coal, which is mainly used in steel production. (China’s state-run steel mills have been dumping steel on the world market for years to gain market share.) Now China has three choices: it can find a way around the coal ban and maintain its market share; it can buy more expensive coal from countries like Australia or Russia; or it could lower production. At this point, the third option seems most plausible.

But what if there was more to this than meets the eye? It's possible that domestic issues, specifically pollution, were a contributing factor in China's latest foreign policy decision. This past winter, northern China was covered in a blanket of smog that was quite literally off the charts.  The air quality index (AQI) in cities like Beijing and Shijiazhuang repeatedly hit 500 on a scale of 500.  The Beijing government issued its second-ever red alert in December, which shut down factories, took cars off the road, and made children stay home from school. It has even gotten so bad that people have taken to the streets to protest the pollution, indicating that environmental degradation has begun to affect social order.

The Chinese government has pledged that it will take action, and it has had surprising results so far. Of the 32 points in the new Five-Year Plan, six of them address environmental protection. Of the 210 coal power plants that were planned for construction, the Chinese government scrapped plans for 103 of them. In 2015, China invested a staggering $102.9 billion in renewable energy, more than twice that of the U.S. In addition, China is slowly lowering the production of domestic coal, taking care not to put too many people out of work at once. The last coal power plant in Beijing closed today, making Beijing the first city in China to be powered by natural gas.

China is cutting its domestic production of coal. It is no longer buying from its biggest supplier, North Korea. Meanwhile, an agreement was signed last June where North Korea would supply China with 4,000 tons of liquefied petroleum gas (LPG) per year. This move may not only indicate that environmental pollution in China has reached a tipping point, but that this reality has begun to affect Chinese foreign policy.

Photo: "great expectations" by Leo Fung (CC BY 2.0) for Flickr. The photo is in its original format; no changes were made. Use of this photo is not endorsement from its creator.

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