Global consumption of coal has declined significantly over the past year, driven by China, which makes up about half of the world’s demand for coal.

But the Asian giant’s break from one of the world’s dirtiest fuels is unlikely to be a clean one: While China seems to be reducing coal production and consumption domestically, political concerns suggest that Beijing will maintain support for coal production in North Korea.

A villager selecting coal at a coal depot near a coal mine of the state-owned Longmay Group on the outskirts of Jixi, in Heilongjiang province, China, on October 23.

china coal mineREUTERS/Jason Lee

This relationship has led China to push for sanctions exemptions for its coal trade with the hermit kingdom, even as Beijing winds down its own coal production — the livelihood of an increasingly restive portion of the Chinese population.

‘There isn’t going to be change’

China’s economy grew 6.9% in 2015, the lowest rate in 25 years, and Reuters has reported that the government intends to lay off 5 million to 6 million state workers over the next two to three years, “as part of efforts to curb industrial overcapacity and pollution.”

In northeast China, a hub of industrial and coal production, those layoffs have already started.

Local economies in parts of Heilongjiang, in far northeast China, fell 10% in 2014. Coal prices in those areas have fallen by half since 2011, and the Chinese pullback from coal and heavy industry has left many workers without work and with few prospects.

Projections for Chinese coal production in 2020, much of which will come from the country’s north.

china_coal_2020_1Courtesy of Stratfor

Chinese leadership has promised that the 1.8 million workers who will be fired from government-run coal and steel firms (others will be laid off from private companies) will be retrained and rehired.

“The opportunities for middle-aged or even elderly former coal miners and steel plant workers are more limited in a province where the economy really has slowed to virtually zero,” Geoffrey Crothall of the nonprofit China Labor Bulletin, which has tracked a significant spike in labor strikes in China over the past six months, told the Associated Press.

Unrest has grown in the northeast, and large protests have taken place. Many workers, mostly young ones, have left the area for manufacturing centers in southern China, according to the AP.

Those who remain, and still have work, say they haven’t been paid in months.

Miners waiting for an elevator to go down into a coal mine in Lvliang, Shanxi province, China, in 2012.


“I don’t even have anywhere left to borrow money from,” Li Jiuxian, a 51-year-old miner in Jundeshan, in northeast China’s Heilongjiang province, told the AP outside a dingy mahjong parlor. “There isn’t going to be change.”

‘The government hasn’t issued any notice’

Despite the domestic measures that have diminished coal production, China seems more reluctant to put checks on the coal it brings in from North Korea.

“Over two weeks after the United Nations slapped harsh new sanctions on North Korea, several Chinese shipping and trade sources say they have not been told of any curbs on the import of coal from the isolated nation,” Reuters reported in mid-March.

Coal is North Korea’s largest export and one of its only sources of hard currency.

An employee walking between front-end loaders, which are used to move coal imported from North Korea at Dandong port, in the Chinese border city of Dandong, Liaoning province, in 2010. Dandong port, near the China-North Korea border, serves as an import center for coal and iron ore from North Korea.


“At this point, nobody has come to us and said you shouldn’t do it,” an official at a company in the port city of Dalian that imports North Korean coal and other goods told Reuters. “I’m not even clear on what the specific sanctions are.”

While China has taken action against some North Korean traders in line with sanctions on the North’s weapons programs, Chinese officials and other experts have cautioned that taking too hard a line against the pariah country could lead to economic disaster.

North Korean leader Kim Jong Un receiving a delegation of the Communist Party of China on an official goodwill visit on October 9, in this photo released by North Korea’s Korean Central News Agency.

kim jong un china diplomats meetingREUTERS/KCNA

“China regards stability on the Korean peninsula as its primary interest,” a report from the Council on Foreign Relations said earlier this year, citing China’s desire to maintain a strategic buffer between it and South Korea as well as Beijing’s fear of a wave of North Korean migrants heading north should their country collapse.

Moreover, keeping the North Korean regime in power accentuates Chinese authority in the region, prevents a pro-West government from coming to power, and forestalls the possibility of North Korea’s nuclear material falling into the wrong hands, according to Douglas Schoen and Melik Kaylan in “The Russia-China Axis.”

Coal deliveries to China from North Korea spiked by 26.9% in 2015, according to Reuters, to 21.7 tons with a value of $1 billion.

While Beijing, which is North Korea’s biggest trading partner, has become more willing to criticize and punish Pyongyang, it has also worked to carve out exceptions to sanctions imposed by the international community.

China is North Korea’s biggest trading partner and its source for many essential goods.

china-nktrade_table_v3Eleanor Albert, Julia Ro/Council on Foreign Relations

“I think it’s an indication that the Chinese managed to negotiate a wide exemption for the coal trade,” Andrea Berger, deputy director of the proliferation and nuclear policy program at the Royal United Services Institute, told Reuters.

“Coal is a big lever for them,” Adam Cathcart, a North Korea-China specialist at the University of Leeds, said to Reuters. “They’re wise from the Chinese standpoint to keep some leeway (so) they’re not branded as sanctions violators if a train goes from China to North Korea (carrying resources).”

Rough neighborhood

Despite all its economic and military power, China’s continued willingness to take North Korean coal is likely a sign that it still can’t totally dictate its relations with Pyongyang — which has few other friends.

“It’s clear that the Chinese have enormous leverage over North Korea in many respects,” said Daniel Sneider of Stanford’s Asia-Pacific Research Center, according to the Council on Foreign Relations.

“But can China actually try to exercise that influence without destabilizing the regime? Probably not.”

Soldiers in front of portraits of North Korea founder Kim Il Sung and the late leader Kim Jong Il after a military parade to celebrate the centenary of the birth of Kim Il Sung in Pyongyang in 2012.

rtr30r9dREUTERS/Bobby Yip

At a time when China is navigating its own domestic economic distortions (and the fraught political conditions they have wrought) as well as a contentious geopolitical scene in the South China Sea, a quiet North Korea is likely in its interest, even if that means shelling out for more dirty coal.

“There is no reason to think that political risks emanating from North Korea will lead China to withdraw its economic safety net for North Korea any time soon,” Council on Foreign Relations senior fellow Scott Snyder wrote in mid-2014.