Eighteenth International Conference on Interdisciplinary Social Sciences

Abstract

In late 2020, China initiated a series of unofficial measures to reduce imports of coal from Australia. For example, Chinese customs officials tightened their scrutiny of coal shipments from Australia, which led to delays, increased inspections, and disruptions to the clearance procedures. Also, Chinese state-owned utilities and power plants were told not to purchase Australian coal. In this paper, we examine the impact of the unofficial coal ban on the global economy utilizing the GTAP model. The results show that both China and Australia could not get to a better economic condition but might become worse off. Both countries’ real GDPs are expected to drop. They are expected to experience a deterioration in the terms of trade, and the loss of welfare. Other Asian countries would get to a better trade condition since they can sell more coal to China at higher prices and import cheaper coal from Australia, resulting in a welfare improvement in those Asian countries. Although the unofficial ban is coming to its end in 2023, it is still of great significance to evaluate its impact through the GTAP model since the results of a computable general equilibrium model are theoretically sound and good for future reference.