China's Propaganda Spin on Emission Reductions

The traffic jams have been affecting local traffic in Beijing city with record numbers of jams clogging the highways and ring roads.

The traffic jam will create severe economic and personal hardship for residents of northern Hebei and Beijing resulting from a major shortfall in coal deliveries of coal for steel mills, power generators and coal related industries. Coal deliveries are crucial to build the critical stockpiles to tide the region over the harsh winter.

The mid Autumn Festival and the National Day holiday will only add to traffic confusion and gridlock.

In an effort to spread blame, even the motor car has come under attack with state media pointing to vehicle ownership in Beijing where registered vehicles exceed 4.5 million and will pass 5 million in 2011

The real problem is Beijing and Hebei coal demand. It is not by accident that the emissions constraints are focussed solely on Beijing and Hebei, while excluding the heavy polluting centres of Benxi, Linfen, Datong, Baotou, as well as other industrial, steel  and coal fired power generating centres in other parts of China.

The gridlock on the Inner Mongolia-Beijing highway is starving northern Hebei and Beijing municipality of coal in the run up to what has been forecast as another severe winter and the CCP is attempting to divert blame.

Hebei is China's major steel producer. Beijing and Hebei are major consumers of power generation and major consumers of Inner Mongolia's  coal.

Beijing and Hebei are the only regions reliant on coal using that highway from Inner Mongolia.The flow of coal will continue to decline and severely reduce the time available to stockpile adequate coal reserves for Hebei and Beijing for the coming winter.

This gridlock has been in the making since early 2009 and Beijing has been fully aware of the implications, but does not have the capacity to accelerate road repairs.

So Beijing is desperate to find an excuse for the event that could have serious repercussions for industry and energy supplies during the coming winter.

It will also conceal, in the short term at least, the real reasons for declining iron ore and coal imports during the 4th quarter of 2010 and the 1st quarter of 2011.

The cuts, blamed on emission reductions, will conceal overcapacity and be welcomed by the steel industry and temporarily, divert some attention away from China's economy.

In summary the media blitz will:

1. Seek international support for China's climate change proposals
2. Seek national support for the CCP's efforts to reduce climate change while the major powers, and the US in particular, are not.
3. Provide an excuse for a major shortfall in coal for power generation in Northern Hebei and Beijing during the coming winter.
4. Conceal poor management and inept policy making in planning coal development and transport in Inner Mongolia.

Countries like Australia, exposed to, and dependent on China’s continued growth, need to be aware of these issues and not rely on official statistics and narratives when planning their own economic strategies.