A relative back home told me yesterday that loose coal is now selling for more than 1 yuan per jin at retail prices—over 2,000 yuan per ton. She kept saying the same thing: people simply can’t afford to burn coal anymore.
In my hometown, winter temperatures can fall to the mid-teens below zero, sometimes close to minus twenty degrees Celsius. When I was young, most families lived in cave dwellings and slept on heated kang beds, so winter life centered around the kang. People even spent much of the daytime there, visiting neighbors and chatting. Back then, cleanliness was not a major concern in the countryside, so when guests came in winter, they were usually invited straight onto the kang. Shoes came off, feet were tucked under a quilt, and everyone sat in a circle talking. It was warm and lively.
As village incomes improved, most households leveled those old cave homes and built brick houses instead. The outside was tiled, the inside whitewashed, and the homes started to resemble urban apartments. Brighter rooms and cleaner surroundings gradually brought different habits. Many families replaced kang beds with regular beds in order to keep things tidy, and they began relying on coal stoves and electric blankets to get through winter.
In previous years, retail coal cost around 600 yuan per ton. A household would typically burn about two tons over the winter, so the total heating cost came to a bit over 1,000 yuan. At today’s price, those same two tons cost 4,000 yuan. If a family has more people under one roof and needs two or three stoves, coal consumption rises even further. At current prices, many households will simply not be able to manage it.
A common family arrangement in rural areas is that grandparents stay behind in the village to care for children who are in school, while both parents work away from home—or the husband migrates for work while the wife remains at home to look after the elderly and the children. According to National Bureau of Statistics data, the average wage for migrant workers in China in 2020 was 4,072 yuan per month. Using that figure, a six-person household supported by only one wage earner would have per capita income of less than 700 yuan a month. If calculated by disposable income, it might be only a little over 500 yuan per person. For a family like that, what does spending 4,000 yuan on coal for a single winter actually mean? Households with healthy elderly people and two adults able to work are in somewhat better shape, but not by much.
My own production team has fewer than 300 households. These days, only a little over 80 people remain in the village year-round. But among those 80-plus residents, 24 are over the age of 80, and 3 are over 90. Cold weather is especially dangerous for frail older people. Many elderly villagers have always struggled to survive the winter. I still remember hearing old people, when the north wind howled and owls called in the night, mutter that they might not make it through this winter. And many really did not. As living conditions improved, surviving winter became much easier than it used to be, though deaths among the elderly still remained noticeably more common in winter than in the other three seasons. Now that coal prices have surged, it is hard not to wonder whether some very old people will once again fail to make it through the season.
China’s coal sector is made up largely of state-owned enterprises. They use state assets to extract state-owned resources. So why should the final price of coal move in line with the international market? In 2020, coal imports accounted for only about 7% of domestic consumption, and imported thermal coal accounted for only about 3%. With import dependence that low, why can’t the state exercise stronger control over prices instead of allowing them to surge along with global markets?
China adjusted its coal pricing mechanism in 2016, adopting a long-term contract system built around a “base price + floating price” model. That year, the National Development and Reform Commission set guidance that used 535 yuan per ton as the benchmark, with adjustments based on the previous month’s CCTD and Bohai-Rim price indexes. That benchmark was still 535 yuan per ton in 2020, yet current prices have risen to roughly three times that level. Such a swing goes far beyond what people normally think of as an acceptable range for price fluctuations in China.
Why hasn’t there been much more forceful intervention in the coal price surge? Is the goal to push the country more quickly toward peak carbon emissions? Is it an attempt to reshape the energy mix through price signals? Is it connected to possible changes in electricity pricing and industrial structure? Or is it meant to improve the balance sheets of coal mining companies? I do not know the answer. What I do know is that the impact of sharply higher coal prices on low-income rural households is real and immediate.
Coal is not just another commodity. For many people, it is a basic livelihood resource, almost as essential as running water. If that is the case, why wasn’t there timely intervention on prices?
I also heard another story connected to the rise in coal prices. In northern China, winter vegetables are heavily dependent on plastic greenhouses. These greenhouses need boiler heat, and I was told that one mu of greenhouse land may require around 30 tons of coal over a winter season. That makes coal the largest cost in greenhouse growing. Yet annual profits from greenhouse vegetable cultivation are only around 30,000 to 40,000 yuan per mu. If coal prices triple, the increase in fuel costs can easily wipe out what used to be the entire profit margin. As a result, some vegetable growers, worried about taking losses, have reduced greenhouse planting.
If that situation is real and widespread, the consequences are easy to imagine: vegetable prices this winter will jump sharply, and officials may once again have to launch campaigns to stabilize the food basket.
Even if greenhouse production has not been hit everywhere to the same degree, winter vegetable prices are almost certain to rise noticeably this year. For low-income rural families, that means a harder season in two ways at once: fewer vegetables on the table and lower indoor temperatures at home.
An economy is a complicated system. The more developed it becomes, the more intricate its internal structure is. And the more intricate that structure is, the more fragile the whole system can be. A relatively small external shock may be enough to trigger broad disruption. That is why intervention in a complex economy has to be handled with extreme care.
One note worth keeping in mind: the overall debt ratio of China’s coal mining industry is around 70%, slightly above the roughly 64% debt ratio for state-owned enterprises as a whole. Another is that the figure of roughly 30 tons of coal per mu for winter greenhouse heating is not based on a precise published source, but on what is commonly said about heating needs in regions with a winter heating season of more than four months.