China Issues Additional Import Quotas

Beginning in mid-May and leading into June, the Chinese government has issued a new set of import quotas across a variety of sectors. Many of these quotas are at an increase from previous volumes, which is likely a result of the Phase 1 trade deal between Beijing and Washington D.C. set back in January. Albeit, there is no guarantee that these increases reveal an upward trend, especially as the Covid-19 pandemic has forced many nations to reevaluate the importance of domestic production.

Research reveals that the decision to increase quotas falls mostly within industries where China is already self-sufficient. One key industry is agriculture, where according to Reuters, the nation already ‘…has a 95% self-sufficiency target for its rice, corn and wheat consumption’. The decision then to allow importers to buy larger volumes thus appears to be mostly influenced by the need to fulfill trade agreements.

Another sector seeing quota increases is the recycling industry. This is important as China has historically processed more than half of the world’s recyclable waste, according to the Yale School of Forestry and Environmental Studies. In the new May 18 quota, thousands of metric tons of copper, aluminum, steel, and paper are allowed to enter China to be processed. DeAnne Toto of Recycling Today recounts that now fourteen companies have received permits to import scrap materials. These new quotas come at a crucial time in global trade where also according to Yale, many nations including the United States and Europe have been scrambling to manage their waste after China ceased the import of many recyclable materials back in January of 2018.

As early as 2017, China has set a goal of setting up a new system by the end of 2020 to basically achieve zero imports of solid waste.

The amount of imported wasted paper decreased year by year from 2018 to 2020, and it’s expected to decrease in the second half of 2020 to basically achieve the goal of zero waste in 2021.

One industry that saw a decrease in quotas was coal, which likely comes in response to the Covid-19 pandemic. This is a twofold response as China has not only seen a decrease in economic activity due the pandemic (and subsequently energy needs) but also is seeking to bolster domestic jobs by keeping mining operations local.

The Sydney Morning Herald reports that Australia is one among many exporters that have seem decreased demand from China, but they believe quotas will increase once again when the pandemic subsides. As China continues to seek a decrease in energy and overall foreign dependence, it remains to be seen how coal quotas will play out in the future.

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