The move would reinforce beliefs that China’s appetite for imported coal is waning. Over the past three decades, China has enjoyed an investment-driven economic boom averaging around 10%, fuelled by commodities. But China’s growth has slowed over the past couple of years and in 2012 GDP growth eased to 7.8%. Indeed, analysts have been gradually revising their growth projections for 2013 below 7.5%.
"The move from an investment-driven economy to one based on domestic consumption implies that China won’t be looking to gobble commodities like it did in the past," says Ferry Wong, head of equity research at Citi in Indonesia. "Indonesian exporters are already feeling the pain as margins are being squeezed, especially smaller producers who find it much more costly to mine."
But there is a high probability that Indonesia would be exempted from the policy because of the free-trade agreement that China has had in place with Asean since 2012, say some analysts.
"There is a chance that Indonesia will still enjoy a zero tariff arrangement because of the trade agreement with China," says Serene Shang Yi Lim, commodities research analyst at Standard Chartered. "But there has been no official statement released by the Chinese government to declare if this will be the case or not.