Archive for 2.1 General Status Reports

Industrial Organization of the Chinese Coal Industry

In this comprehensive analysis of the Chinese coal value chain commissioned by the PESD at Stanford University, Kevin Jianjun Tu examines the industrial organization and structure of China’s coal production, transport, and consumption.  Currently, the size of the China’s grey coal markets seems to have grown to dangerous levels that are too significant to be ignored, it is recommended that the Chinese government should consider assessing the current situation and keep fixing any inconsistency within its statistical reporting system. Program on Energy and Sustainable Development,  Working Paper 103.

2 Coal, 2.1 General Status Reports

The Chinese Coal Industry in an Energy Security and Carbon-Constrained World, a seminar with Kevin Jianjun Tu, Mark Jaccard, David Burwell

China currently consumes almost half of global coal output, and relies on indigenous coal for about 80 percent of its electricity generation. While the use of coal has greatly benefited China in terms of economic growth and energy security, it has created enormous environmental and social challenges, from land subsidence and regional water shortages to global issues concerning air quality and greenhouse gas emissions. Carnegie hosted Kevin Tu, senior associate at Carnegie’s Energy & Climate Program, and Mark Jaccard, professor at Simon Fraser University, in a discussion on how the United States and China could work together on coal issues in order to move the climate agenda forward. Carnegie’s David Burwell moderated.

2 Coal, 2.1 General Status Reports

The Evolution of China’s Coal Institutions

Coal is the major primary energy which fuels economic growth in China. The original Soviet-style institutions of the coal sector were adopted after the People’s Republic of China was founded in 1949. But since the end of 1970s there have been major changes: a market system was introduced to the coal sector and the Major State Coalmines were transferred from central to local governments. This paper explains these market-oriented and decentralizing trends and explores their implications for the electric power sector, now the largest single consumer of coal. The argument of this paper is that the market-oriented and decentralizing reforms in the coal sector were influenced by the changes in state energy investment priority as well as the relationship between the central and local governments in the context of broader reforms within China’s economy. However, these market-oriented and decentralizing reforms have not equally influenced the electric power sector. Since coal is the primary input into Chinese power generation, and power sector reform falls behind coal sector reform, the tension between the power and coal sectors is unavoidable and has raised concerns about electricity shortages. Program on Energy and Sustainable Development (PESD), Stanford,  Working Papers Series #86.

2 Coal, 2.1 General Status Reports

The Future of Natural Gas vs. Coal Consumption in Beijing, Guangdong and Shanghai: An Assessment Utilizing MARKAL

PESD has been studying the emerging global market for natural gas through a series of closely integrated research projects. The topics of these studies range from focusing on the geopolitical implications of a shift to a global gas market, the factors that affect gas pricing and flows as LNG links the U.S. and European markets across the Atlantic basin, and how gas projects fare in privately-owned independent power projects (IPPs) in emerging markets.  One of the open questions in all these studies concerned China–the country uses relatively small amounts of gas now but could use much more in the future. The role of natural gas in the Chinese economy is of critical import both domestically and for global energy and environmental issues. The competition between coal and natural gas in this market has tremendous implications for local air pollution and for climate change. Rising demand for imported gas in China will also shape the LNG market in the Pacific Basin and could lead to the construction of major international pipeline projects to monetize gas supplies in Russia and the Middle East. The present paper is one in a series that looks at the Chinese market in detail.

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The Coal Industry in China and Secondly India

2 Coal, 2.1 General Status Reports

Present State and Outlook of China’s Coal Industry

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China’s Botched Coal Statistics?

Considering that energy-to-GDP elasticities of most developing countries are well above one, the ability of the Chinese government to decouple its economic growth from energy consumption was impressive. While the reported GDP in China grew continuously even during the Asian Financial Crisis, China’s energy statistics declined unexpectedly between 1996 and 1999 before strongly rebounding afterward. The implied energy-to-GDP elasticities between 1996 and 2004 ranged from -0.59 to 1.19. As both the minimum and maximum values have never been witnessed since the beginning of the economic reform era, doubts were raised regarding the credibility of China’s energy statistics. Taking a closer look, one finds that the absurd “V” shape of the energy trend was primarily caused by a 17% drop in coal consumption from 1996 to 2000 and a 55% rebound between 2000 and 2004. Now, the question becomes: what happened to China’s coal statistics?

2 Coal, 2.1 General Status Reports

The Role of Artisanal and Small-scale Mining in China’s Economy

The last decades have seen increased international attention paid to a number of features of artisanal and small-scale mining (ASM). The beneficial roles of ASM in society and the economy in many countries, however, are often overlooked, while its negative impacts dominate official press coverage and scholarly publications of the sector. Through a review of the available literature and statistics, this paper works toward building a balanced picture of the overall role of ASM in China. First, the positive and negative impacts of ASM internationally are reviewed, followed by a short review of suggested and actual international policy responses. Then an examination of the impacts and role of ASM in China is undertaken. The authors argue that the contributions of ASM outweigh its negative impacts, but the central government needs to make more effort to regulate, guide and encourage the development of ASM and to create a sound environment for its operations.

2 Coal, 2.1 General Status Reports

Industrial Policy and Global Big Business Revolution: The Case of the Chinese Coal Industry

China has actively implemented an industrial policy during the last two decades. However, despite important progress, the overall result is rather disappointing. Should China continue to pursue industrial policy? Should China focus instead on developing successful globally competitive firms within the global value chain? This paper, based on an in-depth case study on the Shenhua Group, which has been deliberately built as an indigenous globally competitive coal corporation, argues that it is still possible for China to build powerful big businesses in some sectors. However, a well-designed industrial policy is necessary. 

2 Coal, 2.1 General Status Reports

The Challenges Facing the Chinese Coal Industry: Development, Transition and Globalisation

The purpose of this study is to provide a better understanding of China’s developmental strategy for the past two decades or more, based on case studies of China’s coal industry. It examines how the three parallel challenges from development, transition and globalization determine that reform must be handled cautiously, experimentally, innovatively, and in a balanced way, with the state playing a significant and irreplaceable role. This research differs from others in its discovery of the underlying answers of China’s development strategy by examining the three challenges within a single book and based on one important industry. China has succeeded by understanding that development is both paramount challenge and ultimate goal, that transition and integration with the world must be approached cautiously so as to secure, rather than radically to disturb economic development. However, the three challenges are both overwhelming and conflicting, to pursue one may cause the delay or even sacrifice of another. The best solution requires a complex mix of considerations. China’s development strategy, with both its strengths and weaknesses, has been proved practicable and effective in the difficult conditions created by both domestic and global contexts. By providing such an unbiased and comprehensive examination of China’s development strategy based on the coal industry, this book is of interest not only to those directly concerned in the coal industry but also to those keen to understand the ever expanding influence of China in the world today. 

2 Coal, 2.1 General Status Reports