China’s 12th 5-Year-Plan

Published on Author gjeong

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)

English-language version of the 12th 5-year plan

4 Responses to China’s 12th 5-Year-Plan

  1. I cleaned up the language and of formatting of this post considerably (for instance, in English it is called the “12th 5-year-plan” rather than the “12.5 plan”), but I am still unsure about the meaning of this sentence: “Limited amounts will be efficiently distributed to the provinces, and provincial governments will be charged with following.” I also removed the link to Springer which was not working, and I added a link to an English version of the plan in full.
    I am curious about China’s motives for wanting to build new coal-plants in the US–is this because China’s environmental laws will soon be more stringent than ours? Or to change the balance of pollution-contribution in China’s favor (PR move)? Thoughts on this (Professor Smitka and others)?

    • Thank you so much! I was not sure how to make it clear. Yeah, it is called 12th 5-year-plan in English.
      There have been a number of 5-year plans in China. The aspect of the 12th that I focused on this post was China’s effort on reducing coal consumption. I think one of the reasons/answers to your question is that it might be cheaper for them to build plants in US due to taxation.

      • Glad to help. It is understandably hard to translate abstract or recondite information from a source in one language into another language which isn’t your first.
        It sounds like China is taking serious steps to address pollution. It seems odd however that the Chinese government would promote building new plants in the US as a way to dodge their higher taxes, though–I think it must be in the hope that they can simultaneously increase energy output while decreasing “domestic” emissions.

  2. Let me return to the coal issue: if that’s the core of the latest Five Year Plan (FYP), then it’s indicative of how irrelevant the planning process now is in the Chinese economy. The FYP terminology goes back to the early days of the Soviet Union; you encountered other versions in the Li book and the Perkins article. We’ll examine the underlying methodology and its economic implications later this term. But the bottom line remains that most of the economy now lies outside the plan. And many coal mines have been illegal from the start, so this does not represent a change in policy, only a statement that the government may henceforth gradually try to shut down blatantly illegal mines rather than just ignoring them. That it takes a FYP to do that indicates both how irrelevant plans are, and how entrenched localities in their power.