The Reshaping of China's Coal Trade Flows Amid Geopolitical Shifts: The Decline of Maritime Routes and the Rise of Land-Based Trade
“In recent years, profound changes in the global geopolitical landscape have been reshaping the trade dynamics of China's coal imports. The traditional maritime-dominated coal import system is undergoing structural adjustments, with the significance of land-based transportation channels rising markedly. This shift not only concerns energy security but also reflects strategic recalibrations in China’s foreign economic and trade relations.”
In recent years, profound changes in the global geopolitical landscape have been reshaping the trade dynamics of China's coal imports. The traditional maritime-dominated coal import system is undergoing structural adjustments, with the significance of land-based transportation channels rising markedly. This shift not only concerns energy security but also reflects strategic recalibrations in China’s foreign economic and trade relations.
The Contraction and Challenges of Maritime Coal Imports
For a long time, maritime shipping has been the primary method for China’s coal imports, with Indonesia, Australia, and other maritime nations serving as key suppliers. Data from 2021 shows that seaborne coal once accounted for 83% of China’s total imports. However, as the international situation evolves, this pattern is undergoing significant changes: by 2023, the share of maritime imports had dropped to approximately 65%, and it is projected to fall below 60% in 2024. The fluctuation in Australian coal imports is particularly notable—while they accounted for 39% of China’s imports in 2020, this share had adjusted to around 28% by 2023.
This shift stems from multiple overlapping factors. On one hand, volatility in global shipping costs has intensified, with unexpected events such as droughts in the Panama Canal increasing maritime uncertainties. On the other hand, political and economic changes in some traditional coal-exporting nations have prompted China to seek more stable supply channels. Notably, even as the overall proportion declines, seaborne coal from Indonesia has remained relatively stable, accounting for about 42% of China’s total imports in 2023. This underscores China’s efforts to maintain key supply relationships while adjusting its import structure.
The Rise and Expansion of Land-Based Channels
In stark contrast to maritime routes, land-based coal imports have shown robust growth. In 2023, Russia and Mongolia together accounted for 32% of China’s coal imports, an increase of about 15 percentage points compared to 2020. China-Russia coal trade volume exceeded 110 million tons in 2023, setting a historical record and solidifying Russia’s position as China’s second-largest coal supplier. Mongolia has also performed remarkably, with coal shipments through border crossings such as Ceke and Ganqimaodu continuing to climb, exceeding 65 million tons in exports to China in 2023.
This rise of land-based trade carries distinct geo-economic characteristics. The China-Mongolia-Russia Economic Corridor is advancing steadily, with continuous improvements in cross-border infrastructure such as railways and highways. In particular, newly constructed cross-border rail bridges and ports between China and Russia have increased transport efficiency by over 30%. Once Mongolia’s Southern Railway is completed, its coal transport capacity is expected to achieve a qualitative leap. These infrastructure enhancements provide a solid foundation for land-based coal trade.
Multidimensional Drivers of Trade Restructuring
Geopolitical factors have been a critical variable driving these changes. Turbulence in the international landscape has led China to place greater emphasis on energy cooperation with neighboring countries, strengthening energy ties with land-based partners like Russia and Mongolia. Between 2022 and 2023, the coal trade coordination mechanism under the China-Russia Energy Cooperation Committee yielded significant results, with long-term agreements rising to over 60% of total trade. At the same time, the deepening alignment between China’s Belt and Road Initiative and Mongolia’s Steppe Road strategy has created institutional advantages for bilateral coal trade.
Economic considerations are equally important. Land transport offers advantages in timeliness and turnover rates, making it particularly suitable for coal demand in China’s northeastern and northern regions. Estimates show that coal shipments from Mongolia to Inner Mongolia take about 15-20 days less than maritime shipments from Indonesia, reducing inventory costs by 30%. Additionally, the increasing use of RMB settlements has lowered transaction costs, with over 80% of China-Russia coal trade settled in local currencies in 2023.
Structural Impacts and Future Outlook
This shift in trade flows is triggering a chain reaction: domestic transportation networks are adjusting accordingly, elevating the logistical importance of border provinces like Inner Mongolia and Heilongjiang; customs and inspection services at ports are undergoing continuous upgrades; and related industrial chains are adapting, such as the accelerated formation of coal-chemical industry clusters in western Inner Mongolia.
Looking ahead, this structural adjustment is likely to deepen further. On one hand, continued progress in the China-Mongolia-Russia Economic Corridor will unlock greater potential, with land-based coal imports expected to surpass 40% by 2025. On the other hand, China is diversifying other land-based routes, such as the China-Kazakhstan coal trade, which has maintained an average annual growth rate of 15% in recent years, emerging as a supplementary channel.
Against the dual backdrop of global energy transition and evolving geopolitical dynamics, the "rise of land-based trade" in China’s coal imports reflects not only a pragmatic and flexible energy security strategy but also the deepening integration of regional economies. This restructuring ensures stable energy supply while injecting new momentum into the economic development of neighboring countries, reshaping the landscape of regional energy cooperation.
