China
eyes closer co-op with US in energy
development
December 11
(Xinhua)--
China
and the
United States
might see more opportunities for trade by boosting joint energy development,
Minister of China's National Development and Reform Commission (NDRC) Ma Kai
said Tuesday.
"There could be great potential and fat
opportunities for both countries in improving coal efficiency and promoting
clean energy, " Ma said ahead of the high-profile China-US Strategic
Economic Dialogue, which opens Wednesday.
Ma urged the two sides to find new
ways for joint energy development, saying the
United
States
had advanced technologies and experience to
improve coal efficiency and develop clean energy, which were valuable to
China
.
The Chinese government had been promoting
the use of a variety of cleaner energy sources to reduce its reliance on coal,
as well improving its energy efficiency and pollutant control.
His remarks also came as the two countries
signed a slew of agreements, including pacts on energy cooperation, at the 18th
China-US Joint Commission on Commerce and Trade (JCCT) Tuesday.
One of the 14 documents was a memorandum of
understanding on cooperation of biofuel development signed by the NDRC and the
US
departments of agriculture and energy.
"As two of the world's largest
consumers of oil, this document may help reduce each country's dependence on
imported oil, benefiting both US and Chinese consumers," the US Department
of Agriculture said in a statement released at the JCCT.
Ma said earlier Tuesday that the Chinese
side would work out executive plans, and wished to start work soon.
China
is promoting development of biofuels with
financial support, as the country saw biofuels as environmental-friendly energy
sources.
Ma hoped both countries would also launch
initiatives "as soon as possible" to implement a memorandum of
understanding signed in September, which outlines cooperation in upgrading
industrial energy efficiency.
Tuesday's JCCT also saw US firm Peabody
Energy become an equity partner in China's "GreenGen" project, the
country's first near-zero emissions coal-fueled power plant with carbon capture
and storage.
Ma said the NDRC had drawn up a guideline
with dozens of suggestions on cooperation in power generation, coal, petroleum
and natural gas, renewable energy, as well as energy conservation and
environmental protection, in a bid to boost joint energy development.
"Joint energy development between the
two countries would be mutually beneficial," he said, adding it would not
only help
China
improve
energy consumption structure, reduce greenhouse emissions and cut pollutant
discharges, but could also bring commercial benefits to the
US
side.
The commission said
China
would lift the proportion of
renewable energy consumption to about 10 percent by 2010, and to 20 percent by
2020.
China
would focus on development of hydropower,
bio-mass energy, wind power and solar power in the future, according to a
medium and long-term plan for renewable energy published by the NDRC in
September.
Almost 70 percent of
China
's energy
use came from coal in 2006, with other forms of energy each accounting for a
tiny proportion.
China
vows to develop clean energies
December 26 (Agencies/Xinhua) --
China
promised Wednesday to develop renewable energy for its fast-growing economy,
stepping up efforts to promote hydroelectric, nuclear, solar and wind energy,
as well natural gas extracted from garbage dumps and coal mines.
In the country's first ever white paper
on its energy conditions and policies,
Beijing
pledged to give
top priority to developing renewable energy.
"
China
's
energy development emphasizes thrift, cleanness and safety," says the
white paper titled "
China
's
Energy Conditions and Policies".
The share of renewable sources and nuclear
power in
China
's
energy consumption rose from 4 percent in 1980 to 7.2 percent last year,
according to the white paper.
However, it notes that the energy structure
with coal playing the main role will remain unchanged for a long time to come.
China
will develop the coal industry in an
orderly way, actively developing electric power, expediting the development of
oil and gas and improving energy development in rural areas.
"
China
will pay more attention to
the clean utilization of energy resources, especially coal, and make it a focus
of environmental protection," it said.
Greenhouse Gases Emissions
It also says that
China
takes greenhouse gases
seriously and will take more measures to reduce its emissions.
"As a responsible developing country,
China
attaches great importance to environmental protection and prevention of global
climate change," it says.
"
China
aims to achieve the goal of
basically curbing the trend of ecological deterioration, reducing total
emissions of major pollutants by 10 percent and gain visible results in the
control of greenhouse gas emissions," it adds.
It will also push forward structural
adjustment, improve energy conservation in industry, launch energy-saving
projects and advocate energy conservation in society in effort to promote
all-round energy conservation.
China
is accelerating its development of a modern
energy industry, taking resource conservation and environmental protection as
two basic state policies, it adds.
No Threat To The World
The white paper emphasizes that
China
's
energy development will make positive contributions to the world's energy
security and stability.
"
China
did not, does not and will
not pose any threat to the world's energy security," it says.
As the world's second biggest energy
producer,
China
has a relatively strong foundation for energy production and supply.
"For a long time
China
has relied largely on
domestic energy resources to develop its economy. The rate of self-sufficiency
has been above 90 percent, much higher than that in most developed
countries," the paper says.
It notes that with a large population,
the per-capita average of energy resources is very low.
The per-capita average of both coal and
hydropower resources in China is 50 percent of the world's average, while the
per-capita average of both oil and natural gas resources is only about 1/15 the
world's average. The per-capita average of arable land is less than 30 percent
of the world's average, something which has hindered the development of biomass
energy.
December 24 (China Daily) -- East China's
Shandong
Province
has the largest number of coal-fired power plants in the country. But soon it
will be at the top of another list - nuclear power.
Construction
on three nuclear power stations has already broken ground in the province. The
first two, Shidaowan and Hongshiding, are in
Weihai
City
, while the other, Haiyan, is in
neighboring
Yantai
City
.
Five
reactors are initially planned with a combined capacity of more than 4,000
megawatts (MW). The 11 operational nuclear reactors in
China
now have a total capacity of
about 8,000 MW.
Additional
Shandong
reactors are also on the drawing board. When finished, the sites will comprise
the largest nuclear power base in
China
.
Analysts
say it makes sense for
Shandong
to develop nuclear power as the province needs more electricity to fuel its
rapid development.
With
environmental protection a pressing issue,
Shandong
is shutting down small coal-fired
power plants. By the end of this year it will have closed plants with a
combined capacity of 1,000 MW.
The
province has over 800 coal-fired power generating units with a capacity under
100 MW. By the end of 2010, the province will close other small power plants
that have a total capacity of 4,000 MW.
As
well, as a coastal area,
Shandong
is suitable for construction of nuclear plants, a source with China National
Nuclear Corp (CNNC), the nation's largest nuclear company, tells China Business
Weekly.
But
some residents in the region argue that having three nuclear projects so close
together may threaten the environment. They are also worried about safety.
The
CNNC source responds by saying all nuclear projects in
China
will undergo strict studies
before they get government approval.
"Safety
is always the most important issue for a nuclear power plant," she says.
CNNC
is also beginning development of the Hongshiding nuclear project in
Weihai
City
.
The company now is doing preparatory studies that range from safety concerns to
environmental protection.
The
three nuclear projects will use different technologies developed by
China
as well
as foreign countries.
With
a reactor generating 200 MW, the Shidaowan plant will use high temperature
gas-cooled technology. China Huaneng Group, the nation's largest power company,
will develop the project with China Nuclear Engineering & Construction Corp
(CNECC) and
Tsinghua
University
.
Investment
in the project will total 3 billion yuan, with Huaneng funding 47.5 percent,
CNECC contributing 32.5 percent
and
Tsinghua
University
investing 20 percent.
High-temperature
gas-cooled reactors have high efficiency and safety characteristics. The
nation's first 10-MW high-temperature gas-cooled experimental reactor was
designed and built by the Institute of Nuclear Energy Technology of Tsinghua
University and started successful power generation in January 2003.
The
Haiyang and the Hongshiding plants will employ pressurized water reactors,
which are the most commonly used in
China
.
The
Haiyang project will have two 1,000-MW reactors using the technology from United
States-based Westinghouse Corp.
China
this July finalized a contract with Westinghouse to use the company's
third-generation technology to build four nuclear reactors in the country, two
in Haiyang and another two in Sanmen of Zhejiang Province.
The
11 operational nuclear reactors in
China
all use first- or
second-generation technologies. The four reactors at Haiyang and Sanmen will be
the first to utilize third-generation technology.
Westinghouse
outbid its main competitor, French nuclear company Areva, after two years of
negotiation for the four reactors. No financial figures were disclosed in the
final contract, but earlier media reports estimated it at $8 billion.
In
November
China
signed an
8-billion-euro contract with Areva to use the company's third-generation
nuclear power technology for two reactors in Taishan in South China's
Guangdong
Province
.
The
contract, under which Areva will provide two 1,700-MW reactors, set a record
for the French firm.
For
the Hongshiding project, developer CNNC has not disclosed which technology will
be used, only saying two reactors each with a capacity of 1,000 MW are planned.
CNNC
started to build
China
's
first nuclear power plant, Qinshan nuclear power plant phase I, in 1985. The
300-MW reactor in the facility uses the technology developed by
China
itself.
The
company then built Qinshan phase II and phase III. The second phase used
domestic tchnology, while the third employed technology from
Canada
.
The
company now operates seven nuclear reactors in the country.
December 25 (China
Daily) -- Rapid economic growth has led to an increasing demand for
energy. And as energy prices keep increasing more pressure is being put on
supply and demand. The reform of the energy industry, especially its pricing
mechanism, has drawn much attention.
The
National Development and Reform Commission said recently it was necessary to
reform the pricing mechanism of resource products to further improve
efficiency. But the reform should be implemented at the right time with due
consideration for all concerned.
Energy
prices in
China
are mainly decided and controlled by the government and do not reflect the
scarcity of resources and the impact of energy use on the environment. The
prices are relatively low and the pricing mechanism is not in line with that of
the international market. This has caused serious problems in energy
utilization, economic development and environmental protection.
The
pricing mechanism is not in line with production and consumption. This has led
to the over-exploitation of resources.
China
's rapid economic growth is
mainly built on an economic structure of high-energy consumption and
low-efficiency. The waste in exploitation contrasts hugely with the shortage of
resources.
At
the same time, low energy prices have increased the competitiveness of
China
's
high-energy-consuming, high-polluting and resource-based products, enlarged
trade surpluses and exaggerated the pressure on the yuan's appreciation.
The
government is now paying great attention to energy conservation and emission
reduction. Without reform of the pricing mechanism, the efforts will only
achieve half the results. Reform is a matter of urgency.
Reform
will mean further price hikes, and as it takes hold, it will affect the
producer price and consumer price indices. The pressure of increasing costs on
producers will gradually be transferred to consumers. The process, however,
will take time.
Though
the rise of energy prices will increase pressure on middle and downstream
products, its impact on inflation in the short term will depend on the supply
and demand of consumer goods. Over-capacity will lessen pressure for price
increases, judging by
China
's
current industrial and energy consumption structure.
In
the long run, a price lever is still the most effective way to conserve energy
and reduce emissions. As long as energy prices are low, enterprises will lack
the drive to improve efficiency and cut emissions. The only way to stop
high-energy consuming enterprises from expanding is to increase energy costs.
It is therefore necessary to reform the pricing mechanism, marketize energy
products and let prices guide investment and economic restructuring.
The
reform faces a series of tough issues.
First,
the supporting measures of the reform are not completed. There is a lack of
overall planning and design in the pricing structure of different energy
products. For example, coal prices are market-led now but not electricity.
China
's
crude oil prices are in line with the international market but reform of
refined oil prices has not caught up.
Today
discussions on reform of the energy pricing mechanism are mainly about bringing
China
's
energy prices in line with the international market. But merely stressing this
while ignoring the characteristics of the country's energy resources is not a
good idea.
If
the scarcity of resources and environmental costs are properly considered,
China
's
energy prices may be even higher than the international level, which could
attract more imports of energy resources.
Social
fairness is also an issue that should be considered. The price hikes that will
come with reform will produce different impacts on consumers of different
income levels and social groups. Even prices that are in line with the international
market will harm the interests of some consumers. Transparent subsidies for
certain consumers will help solve the problem. This is also an important part
of the reform.
The
current way subsidies are granted to producers have led to unfair distribution
and consumption, which does not improve efficiency or promote social fairness.
Compared
with other reforms, reform of the energy pricing mechanism will take time
because of its importance, complexity and sensitivity. Marketization offers a
way.
Any
further delay in reform will make us lose important opportunities and increase
the cost of sustainable development. Without feasible alternatives, the
inefficient use of energy resources driven by the low prices today will mean
higher energy prices and a bigger cost to the environment tomorrow.
It
is reported that mounting inflationary pressure could slow down our reform of
the energy pricing mechanism, if we do not do it now, we will have to bear the
costs later.
December 27 (China Daily)--The
first ever white paper China issued yesterday on its energy conditions and
policies provides a panoramic view of the changes the country has made and the
challenges it will face on energy development.
To pursue sustainable economic and social advancement,
policymakers must work hard to ensure aggressive enforcement of an energy
strategy that emphasizes thrift, cleanness and safety.
As the fastest growing major economy with
the world's largest population,
China
has understandably caught more and more global attention for its increasing
appetite for energy. While the price of oil in the international market is set
to break $
100 a
barrel,
no one can ignore the growth of
China
's
energy demand.
The new energy report cleared up a number of
key points of confusion which have fuelled exaggerated concerns over the impact
of
China
's
energy need.
China
is now the world's second-largest energy
producer and consumer and is also undergoing rapid industrialization.
The experience of developed countries does
not allow optimism for the prospect of the global energy supply. If
China
uses as much energy in per capita terms as developed countries to fulfill its
legitimate right of pursuing prosperity and a higher living standard for its
people, its 1.3-billion population will surely make the global energy supply
too tight.
However, it is important to remember, as the
white paper correctly pointed out, that, first, for a long time
China
has
relied largely on domestic energy resources to develop its economy, and the
rate of self-sufficiency has been above 90 percent, much higher than that in
most developed countries.
Second, though
China
's energy consumption is
growing rapidly, its per-capita energy consumption level is still fairly low.
The figures for
China
's
per-capita oil consumption and imports account for only one half and one
quarter of the world's average, respectively.
Third, more importantly,
China
has been
and will continue to be keen on energy conservation.
China
started energy conservation work in a
planned and organized way in the early 1980s and achieved the goal of
quadrupling economic growth while only doubling energy consumption by the late
1990s. Now, the country is pressing ahead with the new task to cut the per-unit
GDP energy consumption by 20 percent by 2010 compared to 2005.
China
's vigorous pursuit of a sustainable energy
strategy will make a big difference for its long-term economic growth as well
as the global energy prospect.
December 19 (China Daily) -- The price of coal used
for power plants in
China
will go up 10 percent next
year, an industry group said yesterday.
"The country's major power companies
have completed contracts with coal producers for next year's supply. The
average increase was 30 yuan per ton," said Liang Dunshi, vice-chairman of
the China Coal Transportation & Sale Association (CCTS).
The nation's big electricity and coal
producers gathered in
Hebei
Province
's Xianghe this
week to sign coal supply contracts for 2008. The top five power producers have
all completed contracts for next year, he said.
The five companies are China Huaneng Group,
China Datang Corp, China Guodian Corp, China Huadian Corp and China Power
Investment Corp.
Booming demand is pushing up coal prices,
said Liang. The nation's power generation will increase 17 percent this year,
the CCTS said.
But coal production will only rise 8 percent
this year, it said.
Analysts said higher coal prices would put
further pressure on coal-fired electricity plants, forcing them to operate at a
loss.
Domestic coal-fired power plants are
expected to consume 1.3 billion tons of coal next year, half the country's
total coal demand, according to statistics.
The 10 percent price rise will add about 40
billion yuan in extra fuel costs for coal-fired power companies, the CCTS said.
Earlier media reports said the country's
power producers had called for the government to raise electricity prices. But
analysts said price increases are unlikely this year due to the high consumer
price index.
Coal pricing has long been a bone of
contention between power generators and coal producers. The government in 2004
approved a mechanism linking coal and electricity prices, allowing electricity
to move in line with coal price increases.
Under the mechanism, electricity prices
could be adjusted if the price of coal rose by more than 5 percent in a
six-month period.
Also, 70 percent of coal price increases are
transferred to end-users, while power generation firms bear the remaining 30
percent.
The government used the mechanism to raise
electricity prices in 2005 and 2006. Liang said there is no timetable for a
third electricity price hike under the mechanism.
Coal-fired power plants account for over
two-thirds of the nation's installed capacity. Last year, the nation's total
generating capacity surpassed 622 gigawatts, an increase of 20.3 percent,
according to the China Electricity Council.
Coal-fired power plants account for over 77
percent of the nation's total installed capacity, it said.
The government has vowed to use more clean
energy sources in its power sector, such as wind and solar electricity.
December 5 (China Daily) --
China
's
recent rapid economic growth has created enormous social and economic benefits
for its people. In fact, the Chinese government has made the greatest
achievement in the history of human rights, lifting almost 400 million people
from poverty to live with more dignity and participate in the economic success
of the country.
However, this growth has also created new
challenges for the government. Two of which are to clean up its pollution and
resolve the energy shortage problem.
Hardly a day goes by without there being
some commentary in the international and Chinese press on the challenges posed
by severe atmospheric conditions in major Chinese cities.
Recently, China Daily carried an article
about a plan to remove more than one million automobiles in
Beijing
in an effort by the government to
improve pollution standards for next year's Olympics.
Also, in a recent article in its Asian
edition, Newsweek carried a story on the severe smog problem in
Hong Kong
. Chinese newspapers report that both the
central government and regional authorities will now restrict industries that
pollute, and consume a lot of energy.
Having lived for many years in a country
that is a pioneer in using clean and renewable energy to power its motor
vehicles, it is this technology that can contribute to
China
's adoption of a clean energy
model.
The petroleum crisis of 1973, coupled with
Brazil
's
former financial difficulties of not having enough foreign reserves to pay for
petroleum imports gave birth to the development of its green renewable energy
program and ethanol automobile technology.
This clean energy model has been implemented
with great success for almost 35 years. All gasoline used in
Brazil
contains a 25 percent mix of
sugar cane ethanol and about one-third of its automobiles are gasoline free -
100 percent powered by ethanol.
Brazil
now even requires, by law, a 5 percent vegetable oil mix in all fuel oil in the
country.
Although China has instituted a program for
E10 gasoline mix - 10 percent ethanol mix - in nine provinces of the country,
the steep rise in the price of corn and the amount of energy it takes to
produce ethanol from corn has made the task of supplying enough ethanol more
difficult.
Using corn to produce ethanol utilizes large
quantities of energy to produce energy. These significant corn price increases
have also pressured food costs and have provoked consumer dissatisfaction.
China
, like the
United States
, utilizes corn to
produce ethanol. Not only is this a less efficient method for producing
ethanol, but utilizing corn as a raw material for fuel creates unnecessary
competition with the food chain.
Even before the recent sharp rise in the
price of corn, the cost of producing one liter of ethanol in
Brazil
was about 21 cents, while the same liter
of ethanol in the
United States
costs 48 cents and 46 cents in
China
.
With current corn prices, the cost for producing
Brazilian ethanol is only about one-third of the
US
costs. One of the major savings
in utilizing sugar cane is that the waste, "bagaco", leftover from
the sugar cane with its juice squeezed out, is used to generate electric
energy.
Not only are sugar and ethanol plants in
Brazil
self sufficient in energy, but they even produce excess energy that are sold to
the local grid to supply neighboring power requirements.
Of course, Brazilian conditions cannot be
compared to those in
China
.
Although both are continental size countries, with
China
being almost one million sq km larger than
Brazil
,
the giant of Asia has almost seven times the population of the giant of
South America
.
Furthermore,
Brazil
can easily convert another 70 million hectares of unused land into agricultural
production without affecting its existing pastures that raise cattle, or even
infringing upon the
Amazon
Rain Forest
.
With foresight, Japan, through one of its
trading companies, has joined with ethanol producers in Brazil and the national
petroleum company to start building 40 new ethanol plants in that country for
its clean energy requirements.
Of course, the new plants will not be able
to substitute for all of the country's energy needs. It does, however, make a
contribution and a difference, especially to the country's outlook on
preserving its environment through the use of a clean energy model.
Rather than spending more of its reserves
for dirty energy,
China
could spend less by using clean energy. With petroleum prices at almost $
100 a
barrel, Brazilian sugar cane
ethanol is clean, renewable and cheap.
The instability of many of the fossil fuel
producing countries and the competition for petroleum resources with its
largest trading partners may be other advantages for
China
to look into ethanol imports.
Present import duty on ethanol in
China
makes this important energy resource prohibitively expensive to import and thus
economically unfeasible. By importing ethanol,
China
also conserves its precious
water resources. Perhaps it is time for this duty to be reviewed.
Anyhow, the import of concentrated sugar
cane syrup is possible. Plants can be built in
China
to convert this imported
syrup into sugar and ethanol. This would help create employment, reduce energy
costs, and primarily, clean up pollution. Another advantage for
China
in using this technology would be its ability to sell, rather than buy, carbon
credits for air preservation under the Kyoto Protocol.
Written by Charles Tang the chairman of the
Brazil China Chamber of Industry & Commerce
China
Mobile
to focus on big users
December 12 (China
Daily)--GUANGZHOU-- China Mobile Communications Corporation (CMCC) yesterday
revealed it would focus more of its strategy on developing corporate and
institutional users, a move likely to attract more partners to boost mobile
ubiquity and network efficiency.
"An
exclusive policy will not work, we will open our doors wider to
telecommunication partners and corporate and institutional users to realize
mobile ubiquity," Wang Jianzhou, chairman of CMCC, the world's largest
wireless operator by market value and subscribers, said.
The cooperation
expansion pledge was announced during the two-day China Mobile Enterprises User
Conference & Mobile Information Forum, which ends today.
The event has
attracted over 1,000 government officials, experts and executives from
corporations such as Microsoft, Nokia, Ericsson, Huawei, ZTE, Motorola and RIM.
A products and
services exhibition of those communications giants was also held in conjunction
with the forum.
CMCC has already
carried out a series of projects to expand its corporate and institutional
users. At the primary stage, it conducted pilots in cooperation with government
departments.
The top Chinese
mobile carrier is joining hands with the Ministry of Construction to establish
urban administration information systems in 28 key cities, including
Beijing
,
Shanghai
,
Chengdu
and
Yangzhou
For the
securities industry, CMCC is cooperating with the China Securities Regulatory
Commission, the Securities Association of China and eight large Chinese
securities brokers to promote investment risk education nationwide.
Notable is the
"Village-to-Village" project, which aims to build mobile networks
with telecommunications partners to cover
China
's remote rural areas.
During the first
half of this year, more than half of the company's new subscribers were from
rural areas, and the total number of rural subscribers for CMCC has so far
exceeded 20 million, Wang said.
Xian Weixiong,
director of the
Guangzhou
transportation committee, revealed the city was developing the partnership with
CMCC's information transportation management system, which he said would
increase efficiency and reduce costs.
"By the end
of October, 1,600 buses and all of
Guangzhou
's
17,600 taxis had installed China Mobile's terminals. We plan to completely
cover the city's public traffic and logistics facilities with the system by
2008," Xian said.
December 27 (China
Daily) -SHENZHEN- Authorities here have taken the first step toward introducing a scheme
that charges motorists for using downtown roads during peak hours in a bid to
alleviate the worsening traffic situation.
Compared with other mainland cities
including
Shanghai
,
Hangzhou
and
Nanjing
,
which are mulling over similar plans, the Shenzhen government has reportedly
gone further, despite considerable differences of public opinion.
"We have just completed the first step.
There is no timetable for the launch of the system and we will solicit feedback
from local residents," an official surnamed Che at the government body
responsible for handling traffic-related issues told China Daily yesterday.
The scheme will be discussed in government
meetings before getting public feedback, he said. A survey conducted earlier
this month by the news website www.people.com.cn found that half of the 84,490
people polled supported the scheme, saying the charge could help optimize road
usage.
However, 44 percent of the respondents were
against the scheme, saying it will raise driving costs but have no effect on
the traffic situation.
According to the Shenzhen transportation
bureau, the number of cars on the city's roads has been increasing by an
average of 15 percent per year, with the total reaching 1 million in March.
Officials reaffirmed the effectiveness of a
road-pricing scheme after studying a similar system in
Singapore
and consulting with
experts from the city-state last month.
Singapore
's introduction of the scheme in 1975, which
has been gradually expanded and improved, has been effective in maintaining an
optimal speed of 45 to 65 kph for highways and 20 to 30 kph for arterial roads,
experts said.
Official figures for the second quarter of
this year showed the average speed of vehicles in Shenzhen is about 30 kph in
the morning and evening peak hours.
Li Jian, a lawyer from Shenzhen, said the
government should not try to solve its problems by simply copying the practices
of other countries and collecting fees.
"The administration raised parking fees
in the commercial areas to reduce demand for private vehicles, but it doesn't
work. I doubt if this scheme will work either," he said.
He said he hopes the government will attach
more importance to urban planning and speed up the construction of subways and the
public transportation system instead.
Another resident, Zhang Kun, said the system
could be effective, but the government must ensure that it is suitable for the
city.
December 19 (China
Daily) -- Partnership with local interests is the only
way foreign carmakers can enter the auto-manufacturing industry in
China
.
On paper, the partnership requirement is deemed necessary to protect the local
car industry. In application, the Chinese government is effectively prohibiting
full equity control.
For foreign carmakers, the primary objective
in establishing joint ventures with local interests is to exploit the
comparative advantage of local entities in manufacturing parts and components,
distribution and after-sales networks.
Along with the increase in the number of
partnerships between local carmakers and large foreign auto groups, a complex
network of partnerships has emerged in
China
. The most prevailing pattern
in the Chinese manufacturing industry is the "one-to-many"
relationship. As with local companies, foreign carmakers can forge ties with a
multitude of local providers.
Three issues are causing disputes in the
management of partnerships between local interests and foreign companies.
First, partnership with advanced foreign
companies can help local firms enhance R&D and management capabilities,
while technological advantages for foreign companies become less apparent.
The primary goal of Chinese companies is
improvement of R&D and production capabilities. Hence, there is a high
probability that partnerships between local and foreign companies will
eventually evolve into competition.
Using R&D capabilities cultivated during
partnerships with foreign companies (including Rover, Volkswagen and GM),
Shanghai Automotive Industry Corp (SAIC) developed its own vehicle, the Roewe
750, which went into showrooms in May. In the few months it has been on the
market, a large number of local consumers have opted for the Roewe instead of
buying GM's Buick Lacrosse or Volkswagen's Passat.
Second, if local firm C partners with
foreign firm B, there is potential for such partnerships to eventually hurt the
competitiveness of foreign firm A. When Volkswagen and SAIC churned out Santana
models in 1985 under a partnership deal, there was a lack of production lines,
with the localization ratio hovering at 2.7 percent. Thereafter, Volkswagen
helped SAIC to build auxiliary production facilities, with the localization
ratio rising to 40 percent in 1997, when SAIC became a local partner of GM.
Third, when forming partnerships with more
than a couple of local companies, foreign carmakers need to keep their
relations with local entities harmonious. After establishing two different
joint ventures, one with Beijing Automobile and the other with Dongfeng
Automobile, Hyundai Motor used a single distribution channel, resulting in
unnecessary competition among its own models.
Foreign firms need to lay a foundation for
shared prosperity with local partners instead of repressing new developments.
The former can sustain a technological gap with the latter by transferring
technology on a contingent, step-by-step basis. In August 2005, DaimlerChrysler
handed over the manufacturing technologies of the Jeep2500 and Jeep2700, models
produced jointly with Beijing Automobile, to a subsidiary of Beijing
Automobile, and established a joint venture, Beijing Benz. Through the
technology transfer, DaimlerChrysler provided Beijing Automobile with an
opportunity to develop its own brands, while successfully differentiating its
joint venture from Beijing Automobile.
Some foreign companies employ a strategy of
controlling technology transfer and repressing the growth of local partners.
SAIC asked Volkswagen to purchase the technology for Volkswagen's Santana model
(1980), and planned to develop a new vehicle development based on the
technology. However, this proposal was rejected by Volkswagen.
In a diversionary action to prevent local
partners from running their own development activities, a handful of foreign
companies are strengthening their control over joint ventures. JAC severed its
10-year relationship with Hyundai Motor in 2006 as the latter attempted to take
full control of the core parts of production and sales.
To prevent the transfer of resources from
local partners to rival competitors, foreign automakers need to tighten control
of resources, as well as minimize management of risk through diversified
investments. Guangzhou Honda devised a strict confidential information
protection measure aimed at preventing leakage of information on the
8G
Accord to its rival Guangzhou Toyota
via Guangzhou Automobile.
Foreign companies also need to reduce their
reliance on single local partners or facilities by forming more than a few
local partnerships.
Toyota
prevents competition among its local partners by applying different positioning
strategies and sales channels for Crown and Reiz models (made by FAW Toyota)
and the Camry (Guangzhou Toyota).
Written by Zhang
Shenwei, The author is a researcher with the China Samsung Economic Research
Institute
December 06 (China
Daily) -- The automobile market has remained robust
despite continuous oil price hikes and talk about a new petroleum tax since
early this year.
The media especially seems to indulge in the
boom more than others - except the manufacturers of course.
The other day, two anchors of an auto news
TV show could not contain their excitement when they announced the type of
vehicles that were drawing the most attention from potential customers at a
recent auto show in
Guangzhou
.
They were none other than SUVs (sport utility vehicles) and MPVs (minivans).
Last year, the production and sale of SUVs
enjoyed double digit increases year-on-year in
China
. The trend has continued this
year.
An automobile page of a national media
portal made use of the two facts that contradict each other, to illustrate six
new brands of SUVs. The report said these "oil-guzzlers" are selling
so well that some people do not even mind paying extra in order to be able to
drive these new brands four or five months earlier.
To encourage people to buy SUVs, the media
spares no effort in glamorizing the fact that owning an SUV is "a must for
consumers who pursue a high quality of life".
However, I find this a little disconcerting.
SUVs are notorious for their heavy
greenhouse gas emissions and fuel-inefficiency compared to regular cars.
Recognizing the drawbacks of SUVs, European countries have discouraged their
sales and use on roads.
Owners of SUVs who drive into the center of
London
now have to pay
more fees to park. As London Mayor Ken Livingstone said last year when he
proposed the new charge, he was trying "to affect the choices people make
in terms of the cars they are buying".
While
Spain
and
Switzerland
have joined
Britain
in levying more fees, other cities in
Europe, including
Paris
and
Amsterdam
, have also begun deliberations to
restrict the number of SUVs on the roads.
Unfortunately, in our society's drive for a
so-called "high-quality" of life, many of us, especially media
people, overlook the drawbacks of SUVs and other cars that consume a lot more
petroleum than regular family cars.
When the media promote SUVs, they seem to be
oblivious to the fact that our country is already petroleum-deficient as well
as plagued by increasing greenhouse gas emissions. It seems the fact that more
than half of the air pollution in the national capital is caused from exhausts
from cars does not matter, when they talk about SUVs.
They simply remain unmoved when government
as well civil society leaders from all over the world have gathered in Bali to
talk about ways to reduce the effects of global warming and deal with climate
change.
The government too, has also been slow to
formulate laws, regulations or new taxes to restrict the development and use of
SUVs.
Only late last month did the organizational
affairs management of the State Council issue a circular requiring the Party
and government departments and agencies to take the lead to use
environment-friendly, oil-efficient, domestically-manufactured vehicles. On
principle, no government organization should use SUVs, except for special
needs.
Above all, the circular asks all departments
and agencies to cut the government vehicles' petroleum consumption by 20
percent.
The circular has all the right requests, but
it will take time and determination to really enforce it and make it effective.
Meanwhile, the media should make louder
calls to people that quality of life should not be achieved by aggravating the
already polluted air and wasting more fossil fuels.
December 13 (China Daily)
-- When
Subway Line 5 opened on October 7, my family took a ride downtown happily.
However,
after a few weeks, we started to drive downtown again when the three of us travel
together. We take the subway only when we travel alone. We hesitate taking a
ride together, because it is very crowded.
Since
its opening, the 27.5-km line that links densely-populated Tiantongyuan in the
north to areas down south through Dongdan - the heart of
Beijing
- carries an average of 400,000
passengers daily. It is about 20,000 commuters more than the previously
projected maximum number.
With
the opening of Line 5, the number of subway commuters in
Beijing
has increased by 59 percent to about 2.5
million a day on average.
The
city's public transport system is still not well connected. The other day, my
parents, who live about
14 km
southeast of where I live, spent an hour-and-a-half taking a bus and then
subway Line 5 to get to my home.
Meanwhile,
traffic seems to be getting worse in areas such as Zhongguancun where
department stores, book stores, and electronic goods markets are concentrated.
Smog was pretty serious over the past weekend.
The
sharp increase in the number of subway passengers and continuous traffic
congestion only reflects how much
Beijing
, as
well as other big cities in
China
,
need to give priority to the development of public transportation, especially a
sound rail and bus system.
I
believe whether a city is modern or not is not reflected by how many cars or
how many apartments its residents own, but by how extensively it can serve its
residents' needs and by making it convenient for them to go about their daily
life.
Moreover,
as global warming is reaching the tipping point with the odds of reversing it
seemingly slim,
Beijing
should muster up more funding and effort to reduce greenhouse gas emissions.
Developing public transport and discouraging the unlimited use of cars is an
important strategy.
The
happy news is that
Beijing
has not stopped at Line 5. Work started last Saturday on building or extending
five subway lines.
Although
there was no glamorous celebration to mark the event, we cannot ignore the fact
that today, a total of 10 subway lines are simultaneously under construction in
China
's
capital. It is projected that by 2015, subway lines will stretch about
561 km
in
Beijing
.
Residents
will be able to walk about
1,000 m
at most to reach any one of the stations within the Fourth Ring Road. Those
residing in the satellite cities in the suburbs - Changping, Shunyi, Mentougou,
Fangshan, Tongzhou, Yizhuang and Daxing - will be able to reach downtown by
rail.
Beijing
has come a long way with its subway
construction. Between 1969 and 2001, only
42 km
of subway lines was completed. Line 1 opened to
regular traffic 10 years after it was completed in October 1969.
With
the intensive work underway, we only hope that by 2015, most of us will find it
easier and more convenient to travel downtown or uptown using public transport.
And
hopefully by then,
Beijing
will be able to reduce exhaust emissions from cars and improve air quality and
the environment, as fewer people will feel the need to travel by car.
December 7 (Xinhua)--
BEIJING
--
Beijing
will introduce cleaner energy for automobiles and greatly cut emissions, as air
pollution has become a major concern for the city in the preparation for
"green" Olympic Games.
From January 1, 2008, automobile distributors in
Beijing
will have to sell
gasoline and diesel meeting the new China IV standards that are equivalent to
the Euro IV standards in the European Union, according to Du Shaozhong, deputy
director of Beijing Environment Protection Bureau.
It is expected the new standards will reduce the
amount of sulphur dioxide pumped out onto the streets of the nation's capital
by automobile exhausts by 1,840 tons every year.
Environmental authorities said major distributors
including Sinopec and PetroChina are "technically mature" enough to
provide China IV standards fuel and are well poised to first sell the product
in Beijing.
The current China III standards, equivalent to the
Euro III standards, have reduced sulphur dioxide emissions from automobile
exhausts by 2,480 tons annually since it was enforced at the end of 2005,
according to official statistics.
To reduce pollutants in emission, some buses in
Beijing
have already used
fuel that meets the China IV standards.
There are 3.1 million motor vehicles in
Beijing
and about 1,000 to 1,200 vehicles are adding to
Beijing
's roads every
day.
Despite a rapid increase in the number of motor
vehicles,
Beijing
has managed to reduce nitrogen dioxide and carbon monoxide, two main pollutants
in exhaust emission, in the air.
Nitrogen dioxide in every cubic meter of air reduced
by 10.8 percent between 1998 and 2006, or from 74 gammas to 66 gammas per cubic
meter, and carbon monoxide decreased by 33 percent from 3.3 milligram to 2.2
milligrams per cubic meter.
About 40 percent to 50 percent of the major
pollutants in
Beijing
's
air -- nitrogen oxides, carbon monoxide and inhalant particulate matter -- come
from vehicle exhaust emissions.
December 11 (Xinhua) --
CHONGQING--
China
's
first self-produced hybrid-power sedan, the Jiexun-HEV, rolled off the production
line on Thursday at a Chang'an Automobile plant in
Chongqing
. It is expected to be put onto the
market soon.
A Ministry of Science and Technology official said
the new sedan was developed using
China
's self-owned intellectual
property rights in terms of the engine, hybrid power system and the car as a
whole. This marked the mastering of core technologies in hybrid-power system by
a Chinese auto enterprise.
Xu Liuping, president of the Chang'an Automobile,
said the Jiexun-HEV was a major component of the "electrified automobile
program" in the state backed high-tech plan, known as the 863-Plan. With a
development period of six years, the car had finally become a mass-produced
model with internationally-advanced technologies.
He said the car adopted a fuel-battery hybrid
technology and reduced fuel consumption by more than 20 percent compared with
traditional cars. The emission also met the state's standard IV, the highest
standard in
China
.
Xu said that ten Jiexun-HEVs would be donated to
the 2008 Beijing Olympic Games to be held in August next year.
Currently in the Chinese market, hybrid cars were
mostly imports that had not performed very well in the market due to high
prices. Quite a number of Chinese auto plants have been developing hybrid cars
but Chang'an was the first to make it possible for mass production.
The price of the new car would be sharply lower
than the imported equivalent models, Xu said.
Chang'an Automobile is
China
's fourth largest auto
enterprise. The China Association of Automobile Industry statistics revealed
that in the first 11 months the company had sold 772,300 automobiles.
December 25 (China Daily) -- Sinopec Group will complete
the construction of a 12.5 billion yuan refinery in
Qingdao
in East China's
Shandong
Province
by the end of
January, a move to further tap rising demand.
The project is designed to
process 10 million tons of crude annually. It will produce 7.6 million tons of
refined oil per year, a source with Sinopec told China Daily.
Annual sales revenue of the
plant is expected to cross 30 billion yuan, said the source, who declined to be
named.
Sinopec started construction
of the plant in June 2005. It has an 85 percent stake in the plant.
Preparation work for the
plant started in the 1990s. The project was approved by the central government
in 2004.
At a company meeting last
week, Sinopec President Wang Tianpu said work on the plant was going smoothly.
It also helped to train a lot of experts for the company, Sinopec said on its
website. But it did not say when the project will come on-stream. The source
with the company told China Daily it would be January next year.
"The project will boost
the company's refinery business as well as increase its market share," Sinopec
said on its website.
Analysts said the project
will boost domestic refined oil supply.
China
, the world's fastest growing
economy, wants to increase oil processing capacity by 25 percent by 2010 to
meet rising demand for fuels and petrochemicals.
PetroChina, the nation's
biggest oil producer, is poised to increase oil-refining volume by nearly 12
percent this year, according to its senior officials.
The company is expected to
process some 120 million tons of oil this year, Liu Hongbin with PetroChina
told China Daily earlier.
In October and November,
facing shortages, top Chinese oil producers Sinopec and PetroChina were running
at full capacity and trying to draw on stockpiles as much as possible.
Earlier this month, the
government gave the go-ahead to Sinopec to start with Kuwait Petroleum Corp the
groundwork on an oil refinery and chemical project in South China's
Guangdong
Province
.
The proposed ethylene plant
in Nansha in
Guangdong
will produce 1 million tons of the chemical a year. The approval allows the
partners to start feasibility studies on the project.
The Nansha complex, with a
planned investment of $5 billion, would be the largest joint venture in
China
,
exceeding the nearby Nanhai petrochemical facilities built by Royal Dutch Shell
Plc and China National Offshore Oil Corp.
Sinopec this month signed a
contract with the Iranian oil ministry on the development of the Yadavaran
oilfield in southwestern
Iran
.
The initial estimate of the
project's cost is about $2 billion. It will be carried out in two phases.
December 19 (China Daily) -- A
center to manage the country's strategic oil reserves was set up yesterday, the
top economic planning agency said.
It will serve as the administrative body for
the nation's oil reserve system and take charge of stockpiling crude and
releasing reserves, a statement from the National Development and Reform
Commission (NDRC) said.
The center will also monitor oil supply and
demand on the domestic and international markets, and enhance
China
's energy security, it said.
Han Xiaoping, an energy analyst with Beijing
Falcon Pioneer Technology Co Ltd, said: "A sound oil reserve system will
help offset oil supply risks when there is an interruption.
"It will also reduce the impact of
fluctuating global oil prices on the domestic market."
China
is the world's second-largest oil consumer
after the
United States
.
The country imported 145 million tons of
crude and 36 million tons of refined oil last year, figures from the General
Administration of Customs showed.
It began to build strategic oil reserves in
three coastal provinces in 2004.
The first batch comprised four bases, in
Dalian
,
Qingdao
,
Ningbo
and Zhoushan.
The bases in
Ningbo
and Zhoushan began stockpiling last
year, while the other two are expected to start operations within a year,
sources close to the project told China Daily.
By the end of 2010,
China
plans to have 12 million tons
of strategic oil reserves, NDRC sources said. Current strategic oil reserves
are put at between 2 million and 3 million tons.
NDRC Vice-Minister Chen Deming said earlier
that by 2010,
China
's
oil reserves will be equivalent to one month of net imports of crude oil.
By 2020, the volume will have increased to
the equivalent of three months' imports, he said.
Last month, the authorities started to
develop a strategic oil reserve in the Wanzhou district of Chongqing
Municipality. It will form part of the second phase of the national strategic
oil reserve plan.
NDRC sources said that on completion of the
second phase, the country will have capacity for 28 million tons of oil
reserves.
Authorities in several provinces, including
Guangdong
and
Hainan
,
are currently in discussions with the central government to build strategic oil
reserves in their regions.
Han said the central government will not
limit strategic oil reserves to the eastern region.
December 21 (China
Daily) --
China
's crude oil production may
rise 1.5 percent this year, according to the China Petroleum and Chemical
Industry Association.
Oil output may climb
to 186 million tons in 2007, and increase to 189 million tons next year, said
Meng Quansheng, the association's vice-president.
China
's dependency on imported oil
will be about 47 percent in 2008, he said.
International oil
prices will range between $80 and $
90 a
barrel next year, the association said.
Zhao Wenzhi, director
of the Research Institute of Petroleum Exploration & Development,
affiliated with the China National Petroleum Corporation, told China Daily
earlier that the country will try its utmost to keep its annual oil imports
below 60 percent of its total oil consumption by 2020.
"Currently
China
's
oil production is rising to its peak season, which may last 30 years," he
said.
Zhao predicted that
China
's
oil output might reach 200 million tons by 2020. And the production volume will
remain unchanged for a long period.
Demand for oil is
estimated to hit 450 to 600 million tons in
China
by 2020.
"We will try to
produce 40 percent of the oil we need by then," he said.
Meeting the domestic
production target of 2020 requires more local exploration and production,
obtaining oil from overseas assets, oil trading and raising energy saving, he
said.
As a clean-energy
option to supplement oil, natural gas will play a more important role in
meeting the country's energy demand.
China
's natural gas output may rise
14 percent to 58.55 billion cubic meters this year and increase to 76 billion
cubic meters in 2008.
China
plans to boost its natural
gas production by 50 percent by 2010 to meet increasing demand.
The nation's gas
production will be 90 billion cubic meters in 2010. Natural gas will then
account for 5.3 percent of the nation's total energy consumption, according to
industry insiders.
China
's natural
gas demand is projected to reach 140 billion cubic meters in 2010.
December 17 (China
Daily) --
China
's
fast-expanding oil tanker fleet is expected to shoulder half of the
transportation of imported oil by 2010, experts have said.
Luo Ping, a researcher with the Institute of
Comprehensive Transportation (ICT) affiliated to the National Development and
Reform Commission, said domestic shipping companies have been encouraged to
expand the oil transportation market in the past years to help guarantee
economic security.
Recent studies by the ICT showed that
Chinese-operated tankers should transport at least 60 percent of imported oil
to ensure supplies. But domestic tankers last year shipped only 16 percent of
oil imported by
China
,
ICT figures showed.
"Based on our studies, we recommended
in 2000 that it should be a long-term goal to have 60 percent of
China
's
imported oil shipped by domestic companies by 2015," Luo told China Daily.
The country imports more than 130 million
tons of oil each year, about 90 percent of which is transported by ship. It has
made
China
, the world's
second largest importer after the
United States
, vulnerable to
transportation costs and other uncertainties such as war.
Given the huge potential of the market,
almost all major domestic shipping companies have rolled out ambitious plans to
expand their fleet.
"Major shipping companies have all
carried out plans to increase oil transportation capacities," Luo said.
Almost all of
China
's major shipping companies
have set a target of at least doubling their current imported oil
transportation capacity by the year 2010.
The China Ocean Shipping (Group) Company
(COSCO), for example, said it planned to have an oil transportation fleet
totaling 10 million deadweight (dwt) tons by the year 2010, up from the current
5.07 million dwt tons.
The expanded fleet will be able to transport
35 million tons a year, accounting for more than 15 percent of China's imported
oil transport in 2010 and up from the current 8 percent, said COSCO
vice-president Zhang Liang.
"We have already placed orders to build
new tankers totaling 2.4 million dwt tons. The rest will be achieved through
rents and more purchases," Zhang told China Daily.
Another major player, China Shipping Development
Co Ltd's Tanker Company, said it planned to expand its oil transportation fleet
to a scale of 8.5 million dwt tons in 2010 through buying and renting, up from
the current 3.9 million dwt tons.
The general manager of the tanker company,
Mao Shijia, said the firm has orders for new tankers of 3.5 million dwt tons.
The expanded fleet, including at least 12 to
14 very large crude carriers, will help the company take up around 15 per cent
of
China
's
imported oil transportation market, up from the current 5 percent, Mao said.
Both companies forecast that domestic
shipping companies will be able to transport 50 percent of
China
's imported oil in 2010.
At the same time, the authorities have
expressed some concern that their new oil tankers are not flying Chinese flags.
The deputy director of the Water Transport
Department of the Ministry of Communications, Zhang Shouguo, said the ministry
would prefer more Chinese ocean-going ships to fly Chinese flags instead of
flags of convenience.
Zhang said the country needs to have better
command over shipping to safeguard economic interests.
To that end, the ministry has introduced a
two-year policy granting tax exemption for ships of certain types - including
oil tankers between four and 12 years old in July this year - if they come back
and register at home.
December 14
(China Daily) -- The government is set to
increase the use non-food products to make bio-fuel to strike a balance between
food security and the growing demand for energy. To ensure that, it has changed
its bio-fuel policy, banning any new plants from using corn.
It will subsidize demonstration projects producing ethanol from
non-staple products such as cellulose, sweet sorghum and cassava, or making
bio-diesel from forest products. It will make it easier for such projects to
get bank loans, too.
Projects that are up to approved industrial standards will be rewarded
with 20 to 40 percent of their total investment, the deputy director of the
Ministry of Finance's Department of Economic Development, Zeng Xiao'an, has
said. Also, bio-fuel producers who lose money when crude oil prices fall will
get flexible subsidies.
Previously, supportive policies used to be reserved for the four
approved corn-based ethanol producers, which got a 1,000-yuan subsidy for every
ton of ethanol they produced. They enjoyed deductions in their sales tax, too.
"The new policy of making bio-fuel from non-food products signals a
major change in shifting production resources," says Kuang Tingyun, of the
Chinese
Academy
of Sciences. The country has to
chalk out a pragmatic bio-fuel strategy, taking its biomass and major
technological breakthroughs into consideration. "The lack of arable land
means bio-fuel cannot rely on food products."
Experts favor the use of crops such as cellulose, sweet sorghum and
cassava to make bio-fuel because they can be grown even in the arid and desert
areas.
Forest
products, including tung-oil and
coral trees, are also "ideal raw material" for the bio-fuel industry,
says on-field market analyst
Cao
Zhi.
The incentives offered are not bad because farmers can get a 3,000-yuan
($405) subsidy for each hectare of forest products used to make bio-fuel, and
2,700 yuan for each hectare of crops.
Technological breakthrough is a must to advance the bio-fuel production
process if non-food products are to be used because
China
lags behind other countries
in productivity and efficiency, experts say. In
China
,
for instance, 12 tons of water is needed to make one ton of ethanol from corn,
but in the
US
, producers can
do with only 1.8 tons, says an AT Kearny report on
China
's bio-fuel industry.
Moreover, in
China
, 3.3 tons
of corn is needed to make one ton of ethanol, whereas in the
US
only 2.8
tons is suffice.
Kuang says the government should change its subsidy policy on the four
existing corn-ethanol producers because they are finding it difficult to get
enough corn. The Tianguan Group in
Henan
Province
is already using
cassava to make 20 percent of its 300,000 tons of ethanol a year.
The four corn-based bio-fuel plants were set up in 2001 because the
country then had a large corn reserve. But the sharp increase in industrial use
of corn and the subsequent increase in its global demand have created a
shortage of the cereal in the domestic market, which in turn has driven up pork
and other food products' prices.
Bio-fuel is fuelling a new market expansion as
China
tries to
raise its ethanol production from 1 million tons a year to 2 million tons in
2010, and 10 million tons by 2020. China National Cereals, Oils and Foodstuffs
(COFCO) will be the major investor in the sector because it has stakes in three
of the four corn-based ethanol producers.
Last year, a COFCO bio-fuel department plan showed that three bio-fuel
projects, using mainly cassava, will go into operation in 2008, and will have
an annual output capacity of 800,000 tons. Plus, a 200,000-ton capacity factory
in the Guangxi Zhuang Autonomous Region, will start running by the end of this
month .
Other energy giants such as Sinopec and PetroChina aim to get a big
share of the bio-fuel market, too, because they are the main organizations that
will eventually mix bio-fuel with oil before it is transported to gas stations.
December 7 (China
Daily) --
China
will charge the nation's oil producers 60 billion yuan in taxes this year on
their windfall from soaring crude prices.
That is 33
percent more than the 45 billion yuan Chinese oil producers paid last year, the
National Development and Reform Commission (NDRC) said in a statement on its
website yesterday.
Windfall tax
payments reached 41 billion yuan in the first three quarters of 2007, the NDRC
said.
China introduced
the oil levy in March 2006 as crude prices advanced, charging oil producers the
additional tax on each barrel of oil they sell for more than $40. Crude oil in
New York
climbed to a
record $
99.29 a
barrel on
November 21.
The government
would use the windfall tax payments to subsidize refiners and other industries
whose fuel costs have surged, the NDRC said. The government controls fuel
prices to prevent inflation from accelerating. Refineries in
China
have been running at a loss
after crude prices gained.
China
paid 21 billion
yuan of such subsidies last year and payments so far this year have reached 42
billion yuan, the NDRC said.
PetroChina Co,
Sinopec and CNOOC Ltd are the nation's three biggest oil producers. PetroChina
and Sinopec are also the nation's two biggest refiners.
China
to prevent coalbed gas blasts in
2008
December 25 (Xinhua)--
BEIJING
--
China
will do more to prevent coal-mine gas blasts next year, after an explosion in
north
China
killed 105 people earlier this month.
This year,
China
reported 898 deaths in 236 such accidents from January to November, according
to information presented during a work conference of the colliery gas accident
prevention panel held on Monday.
There were 57
fewer accidents than in the same period last year, down 19.5 percent, and the
death toll was down 312 persons or 25.8 percent, according to the panel, which
was set up to improve the safety record of the industry.
But prevention
remained difficult, as shown by recent accidents, the meeting heard.
Participants at the meeting cited the deadly accident that claimed 105 lives in
north
China
's
Shanxi
Province
.
China
would approve no
mines with a capacity of less than 300,000 tons next year, the meeting decided.
Small coal mines have been a major source of hazards due to poor safety
facilities and slack management.
The panel pledged
to work to prevent gas accidents through tougher regulations and enforcement in
2008.
The country
should also start extracting coalbed methane from mines as an industry, because
the gas was a prime cause of explosions when left in place, the panel heard.
Production of coalbed methane is hampered by a lack of technology. The meeting
decided that
China
would set up two national engineering research centers for this purpose and
plan to run 10 demonstration projects.
China had
invested 3 billion yuan ($405.4 million), raised through treasury bond issues,
into coal mine gas accident prevention work annually over the past three years,
according to Zhang Guobao, Vice Minister of the National Development and Reform
Commission and also head of the prevention panel.
December 20 (China Daily) -- The year 2007
will go down in history as the year that climate change took center stage in
almost every major development forum around the world. As noted by the United
Nations Secretary-General Ban Ki-moon, climate change has become the defining
issue of our time, set to transform the very way we live and the way our
economies are structured.
In the past two weeks, world leaders gathered for the summit in
Bali
where initial negotiations on a new international
climate agenda have recently concluded. What the world needs is a breakthrough:
a comprehensive climate change agreement that all nations can embrace. We must
set an agenda - a roadmap to a better future, accompanied by a tight time-line
that reaches a deal by 2009.
World leaders, experts and civil society representatives met in Bali to
start discussing a "post-Kyoto" framework for future emission
reduction, which would take effect in 2012 when
Kyoto
expires. The second major point of
discussion was on technology transfer - with calls for new arrangements to help
support the proposed shift to a low carbon world economy.
According to the Intergovernmental Panel on Climate Change, the
scientific body that recently shared the Nobel peace prize, if no action is
taken on reducing emissions in the near future, the planet's temperature could
rise by
4.5 C
or more.
While such figures may not seem that much, consider this: the Arctic is
warming twice as fast as the global average and could lead to rapid melting of
large ice sheets including the massive ice sheets which overlay much of
Greenland
. The risk of these sheets slipping into the
ocean by century's end is real, and would utterly transform the world we know
today.
The world ecosystems act in a non-linear manner, and there is increasing
concern that we are nearing a tipping point, when rapid changes could begin to
take shape at an accelerated rate.
Of particular importance are the findings of the IPCC, and UNDP's global
2007/2008 Human Development Report, that the poor, who have the lightest carbon
footprint and bear little responsibility for the ecological debt borne by the
planet, are the most vulnerable and will be hit the hardest by global warming
These are very alarming facts, but we must not miss their optimistic
bottom line: We can turn the tide of global warming - in ways that are both
affordable and promote prosperity.
Much is made of the fact that
China
is poised to surpass the
United
States
as the world's biggest emitter of
greenhouse gases in a decade.
Less well known, however, are its increasing efforts to confront
environmental challenges.
China
will invest $10 billion in renewable energy this year alone, second only to
Germany
.
At a recent summit of East Asian leaders in
Singapore
,
Premier Wen Jiabao pledged to reduce energy consumption (per unit of GDP) by 20
percent over five years - not so far removed, in spirit, from
Europe
's
commitment to a 20 percent reduction in greenhouse gas emissions by 2020.
In
China
, the year
2007 saw the launch of
China
's
first-ever National Climate Change Program. The recently issued national
climate change policies and the momentum of the
Bali
conference now provide a major opportunity for the country. For example,
China
is already a world leader in solar and wind power. With the right incentive
framework and an expansion of "green investment" into
China
, the future may see
China
producing technologies that help the world
not only
China
,
to meet its green technology needs.
What is needed now is to quickly scale up financing, technology transfer
and public-private partnerships to get the job done. South-South cooperation is
therefore critical.
China
,
India
and other emerging economies can together find solutions.
There are already good cases of local entrepreneurs taking the lead to
innovate and bring to the market new solutions. The challenge now is to
identify these models, scale up these activities and expand their reach into
the market.
This is very much the role of the United Nations. As the UN moves ahead
toward the follow-up from Bali, the UN family in
China
is also working closely with the government and our private and civil society
partners to identify
China
specific challenges to mitigation and adaptation, and new technologies and
financing to address these issues.
The momentum from
Bali
holds a great
opportunity for the future. China's ability over the next several years to
innovate and show leadership on climate change can become a great source of
economic opportunity, and can help find global solutions to our common
challenges.
Simple things can make a big difference if done at scale. Shifting from
regular lighting to energy efficient lighting or from regular refrigerators and
air conditioners to energy efficient ones - these can make a huge impact.
The UN is pleased to have worked over the past decade in
China
on such matters and is now in the process of supporting further activities like
these with our partners at National Development and Reform Commission (NDRC),
the State Environment Protection Administration (SEPA) and various local
partners. Of particular importance is the strong role we see for the private
sector, both Chinese and international.
As a follow-up to Bali, and to support these efforts in the future, the
United Nations in
China
will soon launch with key government partners a new UN-China Climate Change
Partnership Framework (CCPF).
This will be a landmark partnership between nine UN agencies and about a
dozen ministries and private sector partners to bring to bear the best
knowledge and technologies to the table.
One important part of our work will be to bring together global partners
to identify post-Kyoto strategies and solutions. There is a wealth of practical
solutions out there that needs to be piloted and then scaled up where possible.
Technology will be key. There are new cutting-edge "green
technologies" that can be applied to these challenges, new approaches and
best practices that the UN can share with
China
. Bringing knowledge and new
technology solutions stand as core elements of our new UN Climate Change
Partnership Framework initiative.
The UN will bring together leaders and innovators in this field to share
knowledge, within
China
and
between
China
and other emerging economies, and explore practical solutions in the form of new
green investment mechanisms and new green technology transfer mechanisms.
The program will explore steps towards a lower-carbon economy, ways to
mainstream climate change into sustainable production and consumption models,
and how to innovate energy use through practical solutions like green lighting
and distributed localized energy production.
We also have to engage citizens on these issues through expanded
awareness raising activities. UNDP was pleased to partner in July with Al
Gore's Live Earth concert in
Shanghai
to bring attention to climate change issues.
We are happy to now be launching a series of awareness raising
activities with NDRC, SEPA and local partners to bring to citizens across the
country ways in which they can make a real difference in their daily lives.
There is a growing sense that citizens can themselves make a difference and
that they have a strong role to play.
Written by Khalid Malik, the United Nations resident coordinator and
UNDP resident representative in
China
December 12 (Xinhua) --
Bali
- A senior Chinese official said on
Wednesday that the Chinese government attached great importance to the issue of
climate change.
Xie Zhenhua, deputy
head of the
China
's National
Development and Reform Commission (NDRC), made the remarks at a high-level
segment meeting of the UN Framework Convention on Climate Change (UNFCCC) in
Bali, a resort
island
of
Indonesia
.
Xie, who is heading
China
's delegation to the UN climate meeting,
said that in pursuing its economic development,
China
has been undertaking a series
of policies and measures to address climate change and to protect the
environment in accordance with the country's sustainable development strategy,
and has achieved tremendous achievements."
He said that by
restructuring its economy and improving energy efficiency,
China
has saved 800 million tons of
coal equivalent energy in the period from 1990 to 2005 and avoided 1.8 billion
tons of CO2 emissions.
"China's 11th
Five-year Plan for the Economic and Social Development also clearly sets the
targets of making achievements in controlling GHG emissions and reducing its
per unit GDP energy consumption by 20 percent by 2010 over that of 2005,"
he added.
"
China
also formulated its National Climate Change Program, further elaborating the
guidelines, basic principles, detailed objectives and key areas of mitigation
and adaptation. This fully shows the sincerity and determination of
China
to actively address climate change and participate in related international
cooperations,"he stressed.
He added that to
conserving resources and protecting the environment are
China
's basic national policies.
The Chinese government has established the National Leading Group on Climate
Change headed by Premier Wen Jiabao in order to strengthen leadership and to
effectively address climate change
"On the
recently-concluded 17th National Congress of the Chinese Communist Party, Party
Secretary-General Hu Jintao pointed out that
China
will further pursue its
Scientific Think of Development and stick to a human-orientated,
comprehensively harmonious and sustainable development path,"Xie noted.
Xie said that
China
will endeavor to construct an eco- civilization, and will remarkably increase
the proportion of renewable energy, effectively control the emissions of major
pollutants, improve the quality of eco-environment.
China
will also enhance its capacity building on
addressing climate change and make new contributions to the protection of
global climate. All of these efforts indicated that the Chinese government will
be trying its best to make positive efforts to address climate change in a
responsible manner, he said.
Xie assured that the
Chinese delegation will,"as always, actively, practically and
constructively participate in the discussions and consultations of this
Conference in the spirit of cooperation, and make its part of contribution to
the success of this (
Bali
) Conference."
The climate change
conference gathered over 10,000 delegates from more than 180 countries from
intergovernmental and non- governmental organizations.
The Conference is
tasked with drawing up a roadmap for negotiations on a new climate deal before
the current phase of the Kyoto Protocol expires in 2012.
December 24 (China Daily) -- The State Environmental
Protection Administration (SEPA) is attempting to force Chinese companies, both
listed and those waiting to be, to regularly reveal environmental information
to the public.
Disclosure rules for
listed companies could be finalized in the next six months, Ge Chazhong, an
official affiliated with SEPA, told China Daily.
Environmental
disclosure and inspection requirements have already been tightened for
companies applying for their initial public offer (IPO) of shares.
Companies going
public are required by
China
's
existing securities regulations to guarantee disclosure of truthful
environmental details together with financial records in IPOs 36 months prior
to floating.
Deliberate or
premeditated cover-ups risk administrative penalty and criminal conviction,
according to regulations enacted in May 2006.
Ge said SEPA
officials are now working on specific terms for compulsory corporate
environmental disclosure for enterprises already listed.
He said he hopes for
cooperation with the China Securities Regulatory Commission (CSRC) to develop a
new set of regulations by mid-2008.
At a recent forum on
environmental protection and financial service in
Beijing
, Ge criticized Chinese public
companies for generally poor environmental disclosures containing only
"qualitative descriptions" and "scant information".
Some 2006 annual
reports included "just a few characters" or "a dozen or so
characters" on their environmental responsibilities, he lamented.
But in future, SEPA
and CSRC will seek to force public companies to provide detailed information in
annual reports.
Proper environmental
disclosure by publicly listed companies is a key issue because they feature
among the country's largest enterprises and have an important bearing on the
overall economy, Ge pointed out.
Companies may soon be
forced to report key emission indexes, such as SO2 and CO2, and records and
goals in energy efficiency and emission cuts, along with investment-related
data.
If companies fail to
comply with the Environmental Protection Law and government regulations, fail
also to disclose their environmental performance or release false information,
they will be subject to penalty by law and be blacklisted on government
websites.
"Once the first
draft comes out, we will start consulting with the CSRC and corporate
representatives to revise for the final version," Ge told China Daily.
He also mentioned a
study that found just half of 200 Chinese public companies included
environmental details in their 2006 annual reports, with none specifying
emissions data and pollution control investment.
Future mandatory
environmental disclosure will, according to Ge, facilitate environmental law
reinforcement and prompt people to duly weigh environmental factors in investment
decisions.
December 7 (China Daily) -- The environmental problems of the world
today seem to be getting out of hand: Climate change, acid rain, destruction of
the ozone layer, sharp decrease of tropical forests, and desertification. The
United Nations Intergovernmental Panel on Climate Change (IPCC) has basically
concluded that global warming is largely caused by human activities in its
fourth assessment report.
That said, the environmental issue deserves to be examined
from a dialectical point of view: the fact the human race is capable of
overcoming global environmental crises is just as obvious as its seriousness
and urgency. For this reason I would like to borrow the examples of the
"lily pad problem" that once troubled
France
and the "horse manure
public hazard" that some British scholars warned people of during the
Industrial Revolution. They just might help people better understand the nature
of today's environmental problems.
Lily pads float on the surface of water and double the area
they cover everyday. When lily pads cover up the whole surface of a pond, all
fish and other organisms living underneath will suffocate to death. Suppose
lily pads cover up the whole surface of a pond on the 30th day of their growth
(when they bring all life forms in that pond to a horrible end), how long does
it take them to shield half of the surface? The correct answer is 29 days, or
the day before they completely blanket the pond.
The difficult part of this "lily pad problem" is
that people tend to assume that, if lily pads need 29 days to spread over half
of the pond, it would probably take them a few more days to blanket the other
half, while the terrible end will in fact come the day after.
The deterioration of our planet develops in a similar fashion.
It is not likely to alarm people when it slowly worsens over a long period of
time, but it would be too late for them to do anything when that
"extremely tragic end" is on their door step.
The "lily pad theory" qualifies as an appropriate
and severe warning: Absolutely do not underestimate the severity of any
environmental problem, because it develops at an accelerated pace and simply
gives people no time to come to their senses and react when it has
"accelerated" past the point of no return.
The IPCC points out in its fourth report that, if humankind
fails to take effective measures in time, the temperatures at the end of this
century will be
6.4 C
higher than they are now; if the discharge of greenhouse gas in 2050 is not reduced
to half of the 2000 level, temperatures could rise
2 C
higher; climate change will very likely cause
large-scale economic recession and irreversible ecological catastrophe. It
warns that we might find in 30 years that human civilization is on the brink of
retrogression.
This is absolutely not scare-mongering, but a scientific
conclusion proven many times over. In fact, human civilization is but "a
fragile flower" born in the development of nature, which has been going on
for hundreds of millions of years. As early as 1988, Fortune magazine ran an
article that asks the question: "The world is warming and what does it
mean?" and points out "civilization has been developing in a narrow
climate belt on the planet". The temperature on Earth is like one's body
temperature. If figuring out what difference two more degrees in temperature
will make in a few decades time is too hard for you, try imagining how it would
feel if your own body temperature rises from 37
-38 C
to 39
-40 C
.
While realizing the severity and urgency of environmental
problems, it is also necessary to know that human civilization is very
resilient and, through the development of science and technology and the
progress of civilization, humankind can surely overcome environmental crises
and achieve sustainable development. It would be a colossal mistake to lose
hope of human civilization or even buy into the "doomsday" gibberish
some people pedaled a while ago just because the environmental problems are
mounting.
Toward the end of the 19th century, when the Industrial
Revolution was taking its infant steps, the transportation of goods was growing
rapidly in volume, but horse-drawn carts remained the dominant means of
transportation at that time, hence the galloping problem of horse manure as a
"public hazard" was becoming a serious social issue of the day. Some
British scholars sounded the alarm, saying if the transportation volume
continued to grow at the mean pace, the increased number of horses to meet the
rising demand would bury the whole of
England
under a 10-foot thick
blanket of horse manure in 50 years.
However, with the development, use and popularization of
locomotives and ships powered by steam engines, humankind shattered the
transportation problem by means of modern technology. Later, the traditional
means of transportation such as horse-drawn carriages were gradually replaced
by trains and automobiles driven by steam engines, internal combustion engines
and electric motors, and the tragedy of "the whole of
England
being buried under a
blanket of horse manure" did not happen.
The "lily pad theory" reminds people of the
frighteningly accelerated pace at which environmental problems could develop,
while the "horse manure theory" tells people that no matter how
enormous and difficult the environmental problems are, humankind can surely
control and overcome them.
Resolving environmental problems requires science and
technology, but this is not just another matter of science and technology.
Mahatma Gandhi, the Father of India, once said: "Earth provides enough to
satisfy every man's need, but not every man's greed."
The excessive consumption of natural resources as represented
by the Western life style, has triggered fierce criticism. Some point out they
have been consuming resources like there is no tomorrow. Apparently, the sick
condition of the environment on Earth is exactly a reflection of the sick
condition of Western civilization and consumer culture.
As a nation going all out to build up a basically well-off
society, China should be the first to build a healthy, thrifty and civilized
production style as well as a life style that suits our national condition and
the "world" (the real condition of the world) better than ever.
Written by Feng Zhaokui, The author is a researcher with the
Chinese
Academy
of Social Sciences.
December 26 (China
Daily) -- Environmental
issues like greenhouse gas emissions, energy consumption and water and air
pollution have become a major concern in
China
.
Heightened
environmental concerns are reshaping the nation's approach to economic and
social development, pressuring Chinese companies to manage environmental impact
as effectively as other business operations.
Since
China
joined the WTO and won the right to host the 2008 Olympic Games, government and
business leaders have been pursuing environmental investment and raising
awareness. They realize that in today's world of global interconnectivity,
companies that remain in an environmentally unfriendly mode of operation are
not going to reach full potential.
In our report, "Green China: Leveraging innovative
technologies and solutions to uphold companies' environmental
responsibilities", we argue that companies can maximize the opportunities
associated with incorporating environmental considerations into their business
strategies.
Technology is a critical factor contributing to successful
planning and implementation of environmental initiatives. While modern
pollution detection and control equipment are critical in optimizing resource
use and reducing pollution discharge from the core production process, advanced
computing technologies can substantially reduce power consumption in data
centers and by IT equipment in a typical office environment.
Furthermore, environmental technologies are not limited to
operations within one company, but rather can allow for data collection,
analysis and environmental performance management in extended organization
networks like suppliers and business partners.
Heavy polluters can implement a comprehensive environmental
management system to drive environmental protection initiatives.
The system provides a mechanism to facilitate continual
improvement in environmental performance, bringing about enormous benefits and,
more importantly, preventing environmental hazards that could result in
substantial damage to company reputation and financial loss.
Successful implementation of such a management system requires
a high degree of commitment, proactive communications and training, and
alignment of the existing processes and structure with environmental
improvement and risk management initiatives.
Also, a sound technical infrastructure, including effective
pollution prevention and abatement and monitoring facilities, and an effective
management information system to collect, integrate and analyze information and
generate reports, are critical to effective environmental impact management.
Incorporating operational energy efficiency into a company's
overall business strategy will facilitate progression toward a reduction in the
environmental impact and cost of business operations.
One specific area of current focus is energy efficiency. From
an IT standpoint, data center power consumption continues to receive
significant attention. Maximizing computer power use through technological
breakthroughs such as server consolidation and virtualization is one approach
to optimizing energy efficiency.
Our report found that if Chinese companies could achieve a 10
percent energy reduction on all IT facilities, the savings could supply the
entire 2008 Beijing Olympic Games, as well as reduce
China
's carbon footprint by 2.5
million tons.
Chinese companies that incorporate environmental
considerations into business strategy and operations will be at the forefront
of changing markets and contribute to strengthening the long-term
sustainability of the Chinese economy.
A company's environmental impact and management initiatives
are now a major factor for consumers, corporate partners and investors - so the
potential benefits are enormous.
December 28 (Xinhua) -
BEIJING
-
China
opened its first
air-sea interaction and climate change laboratory in
Qingdao
,
Shandong
Province, to closely observe climate change on the sea and to provide
scientific solutions.
The newly-built lab in the eastern coastal
province, funded and run by the State Oceanic Administration (SOA) First
Institute of Oceanography (FIO), would conduct research on climate influencing
phenomena of mass, energy, momentum and radiation fluxes across the sea, FIO
head Ma Deyi said in the China Ocean News on Thursday.
The lab's research topics mainly included the study
of concentration of size distribution of marine aerosol in the boundary layer
over the sea surface and in the coastal zone. It would also study atmospheric
optical depth over coastal zones and open sea, and modeling of the light field
in the atmosphere and ocean, Ma said.
The lab would also act as a nerve center for an
underway oceanic monitoring network. This was expected to be completed next
year for observing climate change in the
Bohai
Sea
, the
South
China Sea
and sea areas, said vice SOA chief Wang Fei.
"We'll strengthen our capability in
forecasting weather and analyzing air-sea interactions in deep seas," he
said.
The UN Intergovernmental Panel on Climate Change
(IPCC) issued a new report on the phenomenon earlier this year. It warned the
world's average temperature, if left unchecked, could rise by as much as two to
four degrees centigrade by 2080. This would probably trigger more natural
disasters endangering human beings.
Representatives from 180 countries convened earlier
this month in
Bali
,
Indonesia
, agreeing on a clear
agenda for the key climate change issues to be negotiated up to 2009. These
included actions for adapting to the negative consequences of climate change,
methods to reduce greenhouse gas emissions, methods to deploy climate-friendly
technologies and financing both adaptation and mitigation measures.
Sea-weather observation and air-sea interactions
analysis were effective in monitoring global climate change.
World-leading
organizations, such as the National Aeronautics and Space Administration, and
top universities, including Massachusetts Institute of Technology and California
Institute of Technology, have already focused on air-sea interaction to know
more about climate change.
December 11 (China Daily) -- BALI-- China yesterday
called on rich nations to establish a public fund within the Kyoto Protocol to
facilitate transfer of green technology to developing countries.
Part of the revenues
for the fund could be generated by developed countries levying taxes on carbon
emissions, environmental pollution or energy and resource consumption, said Zou
Ji, one of 40-odd Chinese delegates attending the world climate conference
which is in its crucial final week.
At yesterday's
meeting, the UN climate chief, Yvo de Boer, said cutting emissions by up to 40
percent was crucial for reining in rising temperatures and drawing investors
who can provide the high-tech solutions needed to ward off catastrophe.
Zou, also a professor
at Renmin University of China, said technologies to reduce greenhouse gas (GHG)
emissions will be more popular in developing countries if the pricing is
reasonable.
He said the fund he
proposed will provide incentives to technology holders, mostly big private
companies, to transfer technologies to countries such as
China
, which is thirsty for green
expertise.
Under the United
Nations Framework Convention on Climate Change, industrialized countries are
obliged to take practical steps to promote, facilitate and finance the transfer
of, or access to, environmentally sound technologies and know-how to developing
countries.
"However,
China
has had to pay very high prices for such technologies to raise energy
efficiency and facilitate sustainable development," Zou said.
Citing the example of
Integrated Gasification Combined Circle (IGCC) technology used in power
generation, he said it has the potential to reduce carbon emissions by 25-50
percent, or even more, which will help
China
- which depends mostly on
coal for power generation - to cut emissions sharply.
But there is no
commercial plant using IGCC technology in the country because the cost of power
generation is about two times that of conventional production.
China
urgently needs advanced green technologies
not only in power generation but also in transportation, construction,
metallurgy and chemical industries, he said.
The World Wide Fund
for Nature (WWF), an international non-governmental organization, said
yesterday:"They (developed countries) need to recognize the need of
developing countries for technology transfer and financing of new, cleaner
technologies - and they need to put up the cash to support their good
intentions."
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