China’s strategy to control and coordinate world coal markets

China is looking to further strengthen its influence over the global coal market, industry analysts have suggested.

The Asian giant already has a major influence on the price of the world’s most important energy commodity, with state-imposed production curtailments driving a mini coal boom in the second half of last year.

Australian coal stocks fell last week as China announced it would not be reinstating the limits.

That power could now be set to increase further, with a Chinese state-owned miner – Yancoal – currently bidding for a major stake in Newcastle Port, the world’s biggest coal export harbor.

Yancoal’s parent company has said that it wants to have greater price-setting power in the Asia-Pacific region.

This has caused jitters in Korea and Japan around ceding elements of their energy security to China.

China experts say that investments in overseas coal infrastructure form a key plank of the government’s ‘One Belt One Road’ strategy: a proposed sphere of economic and political influence to rival that of the US.

With an increasingly coordinated strategy to control global commodity prices through production levels, China’s growing influence over Asia-Pacific energy security is raising some concerns.