To its critics it has confirmed their views, and to its investors it is all a monumental media beat-up.
Either way, China's decision to ban imports of poorer quality thermal coal, which is used mostly to generate electricity, and to cut imports generally by 50 million tonnes by year's end throws more fuel on the fire of the climate change debate – and coal's role.
And coming ahead of a new round of UN climate change talks in New York next week, the timing of the announcement is impeccable. But as with many things in China, even though the decision is portrayed as aiming to improve local air quality, at its core are efforts to bail out its troubled local coal miners and power generators as its economy continues to weaken.
China says it will ban from January 1 the importing of coal with more than 16 per cent ash and 3 per cent sulphur to the Yangtze River Delta near Shanghai and the Pearl River Delta near Hong Kong. They will join the conurbation of Beijing-Tianjin that already has the tougher restrictions in place.
This will potentially hit as much as 25 million tonnes of Australian coal sold annually to China, according to the Bureau of Resource Economics. Some of this coal can be washed, or blended, to reduce the level of ash, but it comes with a cost to an industry already axing jobs and slashing costs.
"They've been tossing these numbers around for a while and only now come to a landing," says Mark Melatos of the School of Economics at Sydney University. "It seems to be interesting timing," he says, since it comes directly ahead of the next round of UN talks.
"In making these changes, they are pushing the environmental benefit. They've definitely done part of it with the pollution issue in mind, but more broadly the changes should be seen in the context of China's economic slowdown."
And for China, which has fallen foul of the World Trade Organisation on previous attempts to impose tariffs to assist domestic industries, changing regulations can sidestep an obvious pressure point.
"Rather than using tariffs, adopting a standards-based approach" may be the way China handles trade policy in the future, he says. "There may be very good reasons to burn cleaner coal, but it also assists your power generators and miners.
"Tariff rules are more concrete, but standards are more difficult to nail down. There may be, for example, very good scientific reasons for the decision, but with a protectionist agenda in the background."
Industry specialist Wood Mackenzie cautions against confusing China's measures aimed at tackling air pollution with its greenhouse gas emissions policies, which will be centre stage at the UN meeting next week.
"China's air pollution plan is not about penalising coal, but using it more cleanly," says Rohan Kendall, Wood Mackenzie's metals and minings manager for eastern Asia. "Coal dominates China's electricity supply and it can't move away from it easily. Until 2035, coal will still dominate, therefore the focus is on emission controls in heavily populated areas."
Kendall says the higher ash product some Australian thermal coal exporters are supplying China was developed at the behest of the Chinese buyers. On his reckoning, the new regulations can hit as much as 40 million tonnes of Australian shipments. This is worth close to $US3 billion ($3.35 billion) at present prices.
Coal miners can wash the coal, but whether the Chinese buyers will pay a premium for cleaner coal is doubtful.
Indonesia, by way of contrast, is in a better position because, even though its coal is generally of a lower value than Australian coal, it has lower ash, so it can more easily meet China's planned regulations.
For an industry long used to deep cyclical swings, the prospect of the loss of about $US3 billion in sales when it is already struggling to slash costs will at the very least prolong the downturn.
"I don't see any significant change to the demand growth profile for coal," says one of the country's richest businessmen, who has made his fortune by riding successive waves of the coal boom. "The reality is the industry is in over-supply."
Earlier this month, one of mining giant Glencore's top executives Mick Buffier, who heads its extensive Australian coal operations, said as many as a third of local coalmines were losing money. The strong Australian dollar was one factor and, if the weaker trend was sustained, it might give the industry some further breathing space.
So far this downturn, there has been close to 10,000 direct mining jobs lost across the industry after mining jobs fell to close to 50,000 from about 60,000 at the peak of the cycle, according to CFMEU data. Much of those losses have been in Queensland, but more than 3000 jobs have been lost so far in NSW.
Peter Colley, the national research director with the CFMEU's mining and energy division, says the industry anticipated substantial job cuts in the second half of 2012 and the first half of last year, but with the cuts slowing since then as some mines expand and others hire.
In May there were 21,986 miners in NSW, down from the peak in mid 2012 of about 25,000, he said.
The last big downturn in the coal industry was in the late 1990s, which prompted the likes of Shell and Peabody to bail out.
Yet about five years later, Peabody was back, paying $2 billion for Tony Haggarty's Excel Coal in 2006 then a hefty $4.8 billion for Macarthur Coal in 2011, at what was probably the market's peak.
Since then, the price of coking coal, which is used in steel making, has slumped from about $US300 to $US120 a tonne over the past three years and the thermal coal price has slid from about $US135 a tonne to less than $US70 a tonne in recent sales.
Along with the billions of dollars spent just on expanding coal production capacity – shipments through the world's largest coal export port at Newcastle are running at more than 170 million tonnes annually – there has been more than $1.2 billion spent to upgrade the railway network over the past five years and more than $3.5 billion on coal terminals at the port.
And with many exporters locked into supply contracts that force them to ship coal even if they lose money, the pain is not likely to be relieved until the thermal coal price gets back towards $US100 a tonne at least.
