China’s decision to punish Australia through trade is the result of both feelings and calculations. Beijing is angry at Canberra and is implementing a plan to inflict pain – making a case to the world that those who dare to offend China will pay the price. But Beijing’s approach of selectively picking battles is costly for China, as well. China has cited anti-dumping probes and strict quarantines as legitimate reasons to restrict Australian imports , but few people are blind to the bigger picture of Beijing’s hostility towards Canberra – although it’s another issue of debate over whether Canberra has really asked for it. Beijing’s trade measures targeting Australia, therefore, could be seen as China using its trade power through its huge domestic market as a weapon to serve political purposes. This perception will not help Beijing’s effort to be viewed as a believer in, and supporter of, free trade, nor advance its goal of joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership , a regional 11-member trade deal in which Australia is a member. Beijing’s trade restrictions are meant as a warning to Canberra, but will they work? It could also undermine China’s own efforts in seeking closer trade and economic ties with regional trade partners. After all, who would want to cultivate a closer relationship when it could be used as a tool of punishment in the future? At the same time, measures against Australia could backfire on China’s own economy. As China’s economic growth quickly gains momentum, thanks in good part to an ongoing property and infrastructure building boom and an export boom, China is more than ever dependent on Australian iron ore to feed its steel furnaces, and on Australian coal to generate power to keep its export manufacturing apparatus running. China reassures public of ‘balanced’ coal supply for winter as provinces cut back power to factories It is an exaggeration to say that Beijing’s unofficial ban on Australian coal imports is the main reason for electricity blackouts in some parts of China, but it’s hard to completely exclude the ban from the analysis. China’s coal-fuelled power plants in the coastal regions love Australian coal because its high quality can help cut toxic pollutants. The reduced supply of Australian coal has, to say the least, disrupted the balance in China’s coal market. Beijing is unlikely to abruptly change course, as its feelings about Canberra are still strong. But Beijing may need to recalculate the net benefit in light of emerging costs at home and abroad.