I wanted to follow up on my previous post. In this post, I will discuss China’s 12th “5-year-plan,” a major political indicator and policy-setter. In 2011, China began to implement new economic and industrial policies outlined in its twelth Five Year Plan (2011-2015), which will remain in place until a 13th one is officially adopted in 2015. It includes methods to improve qualitative growth, increase domestic demand through income growth, advance industrial structure, resource conservation, and environmental protection, improve human welfare, and promote strategic industrial policy. I am going to focus on the coal-consumption aspect of the plan.
According to the plan, China will consolidate the number of coal companies from 8,000 to 4,000 through mergers and acquisitions by 2015 and build ten big coal companies that will produce 60% of China’s coal energy. The plan also states that new coal production factories will be built in the West. Moreover, the plan states that China will develop clean coal technology and coal-bed methane (CMB) extraction infrastructure capable of extracting 30 million cubic meters of this natural gas: CMB is cleaner than conventional natural gas, and its capture is considered not only an important energy source but also one of the primary ways to reduce coal production emissions (in the US, CMB released during mining makes up 10% of total methane emissions). The plan also states that China will invest in coal-processing chemicals, and will reduce national energy consumption to 4 billion metric tons of coal equivalent (6.15 trillion kWh) annually by 2015.
How will China achieve these goals? Limited amounts will be efficiently distributed to the provinces, and provincial governments will be charged with following. As mentioned above, China will also introduce new environmental regulation and will work to develop clean technology. While trying to improve its economic growth rate, the Chinese government is also fighting against its pollution problem by reducing coal consumption. This policy is one of the major actions that China has taken to lower its pollution level while growing the economy. With this policy, Chinese companies will have more incentives to develop clean technology and other forms of energy consumption.
Further reading: Korea-China Biz Law Center (Korean Language)