China is home to the world’s second largest proven coal reserves after the United States, and prior to 2009, China was a net coal exporter. Coal is a cornerstone of the Chinese economy, representing 77 percent of China’s primary energy production and fueling almost 80 percent of its electricity. Moreover, China is the world’s top coal consumer, accounting for nearly half of global consumption in 2010.
Over the past decade, China’s domestic coal output has more than doubled while its coal imports have increased by a factor of 60—the country’s dependence on other nations’ coal exports is growing. In 2009, the global coal market witnessed a dramatic realignment as China burst onto the scene, importing coal from as far away as Colombia and the United States. With 182 million tons (Mt) of coal sourced from overseas suppliers in 2011, China has overtaken Japan as the world’s top coal importer.Moreover, as the world’s top coal consumer, China’s imports could rise significantly again by 2015.
Given the enormous size of China’s domestic coal reserves, why is China moving to import coal from abroad instead of producing all its needs domestically? Might this phenomenon be as superfluous and foolhardy as carrying coals to Newcastle, England’s major exporter of coal in the fifteenth century? Newcastle, after all, had more coal than anywhere else.
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