China declares protectionist trade war war against Australia

"China, the world's top coal importer, will levy import tariffs on the commodity after nearly a decade, in its latest bid to prop up ailing domestic miners who have been buffeted by rising costs and tumbling prices.

The sudden move by China to levy import tariffs of between 3 percent and 6 percent from October 15 is set to hit miners in Australia and Russia - among the top coal exporters into the country.

..."China is clearly moving to protect its local miners. Given that the tariff also covers coking coal, Australia, being the top supplier to China, is likely going to be the most affected,"...

The Ministry of Finance said in a statement on Thursday that import tariffs for anthracite coal and coking coal will return to 3 percent, while non-coking coal will have an import tax of 6 percent. Briquettes, a fuel manufactured from coal, and other coal-based fuels will see their import tariffs return to 5 percent.

Import taxes for all coals, with the exception of coking coal, was at 6 percent prior to 2005 before they were scrapped in 2007. Coking coal import taxes were set at 3 percent before being abolished in 2005.

...Chinese traders were only willing to pay about $65 a tonne for coal with heating value of 5,500 kcal/kg (NAR) on a landed basis before the tariff was announced, against offers of about $66 a tonne by Australians, traders said.

"With the latest tax, Chinese can only offer around $62, which means Australian sellers will need to cut prices by about $3.50-$4 a tonne," said a senior trader at major international trading house.

"It is game over for Australian coal."

...The China National Coal Association, which had submitted proposals to reduce domestic output, reduce the tax burden and regulate imports, had urged Beijing to act swiftly to support the besieged sector, where 70 percent of the miners were making losses and more than half were owing wages.

On a broader level, the persistent slump in coal prices has put a severe financial strain on coal-dependent provinces such as Inner Mongolia, Shanxi and Shaanxi, which are already struggling with high debts and a weakening property market.

...Beijing has also asked its state-owned power utilities to cut coal imports by as much as 40 million tonnes from September to December, a move that is set to hit imports in the fourth quarter.

China, also the world's top coal producer and consumer, saw imports rise 13 percent from a year ago to 327.1 million tonnes in 2013, accounting for about 10 percent of the country's total consumption. (1 US dollar = 6.1299 Chinese yuan)..."

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If financial markets are mirrors of mass psychology, and many simultaneously experience emotional instability, loss of confidence, unresolved grief, unemployment, depression, homelessness, stress, career burnout, anxiety, sleep disorders, and self-esteem along with feeling deceived by our leaders, what does the recovery process of a widespread nervous breakdown involve?

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