Greenpeace Report: The Myth of China's Endless Coal Demand: A missing market for US Exports
Nice fairly objective summary of all the reasons not to be optimistic about coal exports. I think they overestimate the ability of the government to curb consumption of coal and the ability to substitute in renewable on a large enough scale. But still a good summary of all the things that point to moderating increases in demand for coal
A new report identifies several factors that cast doubt on the future of Chinese demand for US coal, including new national and local policies in China aimed at reducing air pollution and capping coal use, slowing economic growth, surging renewable energy growth, and increased public concern about air pollution
1. A DESPERATE INDUSTRY—NOT SOUND ECONOMICS—
IS DRIVING US COAL EXPORT PROPOSALS
2. CHINA PRODUCES NEARLY ALL Of THE COAL IT CONSUMES
3. CHINA’S ECONOMIC GROWTH IS SLOWING
4. COAL USE IN CHINA IS FLATTENING OUT
5. CHINESE POLICY CAPS ON COAL PRODUCTION AND
CONSUMPTION WILL DECOUPLE ECONOMIC GROWTH FROM COAL
6. RENEWABLE ENERGY IS ON THE RISE
7. CHINESE SOCIETY IS RESISTING COAL AND bECOMING MORE
AWARE Of ITS IMPACTS ON HEALTH AND WATER
8. UNSTABLE ASIAN DEMAND HAS SUNK US COAL EXPORT
PROPOSALS IN THE PAST
9. INTERNATIONAL COMPETITORS RECOGNIZE FLAGGING CHINESE
DEMAND
China's Ministry of Railways to be merged into Transport Ministry
International Railway Journal
The first ministry-level reform in five years
CHINA's Ministry of Railways (MOR) and the country's transport ministry are set to be merged, under plans reportedly agreed this week by the country's new leaders
China’s rail ministry faces break-up
FT
Simon Rabinovitch in Beijing
Should make investment in the industry easier.
Marred by corruption and weighed down by debt, China’s railway ministry is expected to be eliminated in a shake-up that would mark the first governance reforms by the country’s new leadership.
The railway ministry has long functioned as a state within a state in China, with its own police, courts and some 2.1m employees. By taking on such a powerful entity, Xi Jinping, the incoming president, would be displaying a willingness to push through changes to the country’s system of government that are needed to sustain rapid economic growth.
The restructuring, which local media say was discussed at a Communist party assembly that ended on Thursday, is likely to fall short of reformers’ hopes for consolidation of the bodies that oversee financial and energy affairs.
Nevertheless, rolling the railway ministry into the transport ministry, a change previous leaders discussed but failed to implement, will mark the first major change to the Chinese bureaucracy in five years.
“The railway ministry’s monopoly of the industry has wiped out competition. There’s consensus among officials and academics about the main roadmap for reform,” said Zhao Xu, a researcher with the Unirule Institute of Economics, a think tank in Beijing. “What should be done first and foremost is to split the business section from the political one. Technically, it’s not difficult. Politically, it might be.”
Details of the restructuring have not been announced, but local media have reported that the decision to combine the railway ministry with the transport ministry has been made, and that personnel reallocation has already begun.
Mr Xi and the central committee of the Communist party – a top governing body – gathered in Beijing this week to discuss the reorganisation and to approve the appointment of senior officials. Most decisions will only be announced in the next two weeks when China’s largely ceremonial parliament holds its annual session.
The World Bank and a research institution under the Chinese cabinet warned in a report last year that the government had to move quickly to break up state-controlled monopolies which are stifling growth in key sectors such as telecommunications and banking, or risk economic stagnation.
The railway ministry has resisted previous attempts to cut it down to size but its authority has been eroded over the past two years to the point that many observers now believe its demise is inevitable.
Liu Zhijun, the railway minister, was removed by the Party in early 2011 for disciplinary violations, a term which is usually code for corruption in China. He has yet to stand trial.
In mid-2011 two high-speed trains crashed, killing 40 and weakening public trust in a government which had held up the bullet trains as the epitome of the country’s gallop towards a gleaming, modern future. An official investigation alleged that a culture of corruption and lax safety standards fostered the conditions that led to the crash.
Massive investment in rail – China built up the world’s biggest high-speed rail network in just five years – has also saddled the ministry with debt. The railway ministry owed creditors Rmb2.7tn at the end of the third quarter last year, almost quadruple the total in 2008.
“The ministry is just like a big complex company which operates a nationwide railway network and uses a single accounting book. It simply doesn’t work in the current economy,” said Hu Xingdou, an economics professor at the Beijing Institute of Technology.
Unlike the aviation and automotive industries, where the regulatory and commercial bodies are separate, the functions of oversight and operations are both controlled by the current railway ministry.
Mr Zhao predicted that after the reforms the enlarged transport ministry would only be responsible for regulation. The business of running the railways is expected to be hived off into a separate body, which may be run as an independent for-profit entity.
There are still many unknowns – for example, whether the commercial entity will be split according to geography and whether freight and passenger rail will be assigned to separate companies. If the government approves the merger of the rail and transport ministries, it will still take several years for the reforms to be fully implemented.
Additional reporting by Emma Dong