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5 White Paper on the Business Environment in China
reportedly hopes to surpass Germany as the world’s largest of living we must ask who will feed Chinese people in the
solar energy market by 2013.27 future.”33
Ine cient transmission is said to be the biggest challenge It is been noted that due to these pressures, China’s adop-
to fully exploiting the bene ts of “green” power generation, tion of biofuels will be contingent on so-called “second gen-
however20 One project to address this concern is the State eration” products which are derived from non-grain sources
Grid Corporation of China’s plan to build a network of ultra- such as cellulose.33 Accordingly, the Ministry of Finance and
high-voltage (UHV) transmission lines by 2020.28 e rst the State Administration of Taxation co-issued the “Circular
part of this grid, an AC line linking Shanxi province to Jing- to Clarify the Application Scope of Consumption Tax Ex-
men city in Hubei province, was completed in 2009.29 emption for Pure Biodiesel Made from Waste Animal and
Plant Oils” (Caishui [2011] No. 46), which is expected to
A January 2011 Reuters report on the State Grid both incentivize legitimate biodiesel production while also
Corporation’s plans for UHV transmission lines indicated that preventing the illegal ‘recycling’ of restaurant waste oil: in
the company was “alone earmarking more than 500 billion 2010 it was reported that two to three million tons of swill-
yuan ($76 billion) to build 40,000 km of lines by 2015;”30 the cooked dirty oil were returned to dining tables every year in
State Grid Corporation itself reports that it plans to complete the PRC, seriously threatening the country’s food safety and
a total of 10 UHV projects by 2015 and 15 by 2020, with public health.34
a budgeted investment of approximately 1.6 trillion yuan
(signi cantly more than was earlier reported by Reuters).29 Oil’s importance to China’s development and the inevitable
increase in fuel consumption as more consumer purchase in
“Green” generation technology is also receiving automobiles remains a far more immediate concern than
government support*, including the requirement that all biofuels. According to Xinhua, the PRC ranked fth among
electricity generated by renewable methods must be purchased oil producing nations as of 200835, and remains the world’s
by the (state-owned) grid companies, and that the purchase second-largest oil consumer.36
of the same is to be supervised by the State Council Energy
Department and the State Power Regulatory Agency, with As of December 2008, the building of the second phase
the caveat that those parties, in addition to the State Council of China’s strategic oil reserves (rumored to hold up to ap-
Finance Department, are to “determine the proportion of proximately 170 million barrels, but still dwarfed by the U.S.
renewable energy power generation to the overall generating Strategic Petroleum Reserve, with its capacity of 700 million
capacity for a certain period.”20 barrels of crude oil) was con rmed.37
Despite such regulatory bene ts for renewable generation, e importance of this strategic reserve is highlighted
coal will likely continue to play the most important role in by the PRC’s heavy reliance on imports for consumption: a
power generation in the country: in 2009 Asian Development January 2010 article in China Daily noted that “Imported
Bank o cial Ashok Bhargava noted that “no matter how crude oil accounted for 52 percent of the country’s total oil
much renewable or nuclear is in the mix, coal will remain the consumption last year,” and that “Importing more than 50
dominant power source.”7 percent is a globally recognized energy security alert level.”38
Coal’s dominance will likely continue for the coming 40 to By May of that year, an article in the same publication
50 years, Ni Weidou of the Chinese Academy of Engineering more casually reported Sinopec o cials stating that “ e
told China Daily a year later.31 Coal consumption, however, is country may have to rely on imports to meet as much as 70
expected to draw from 70 percent of total energy consumption percent of its crude oil needs in the next decade,” although no
in 2009 to 63 percent in 2015, according to the National mention was made of energy security risks.39
Energy Administration.32
Over the course of 2010, the nation reportedly consumed
Despite international fashion, China’s use of biofuels can 440 million tons of oil, 200 million tons of which were im-
be expected to be much more sparing than other nations, as ported.40
China’s arable land and food supply demands leave little sur-
plus to—literally—burn. “Some analysts expect China to overtake the United States
as the world’s biggest crude oil importer as soon as 2017.”41
“Chinese agricultural products will continue to increase
yields and e ciency, but the lack of water and arable land will Similarly, it was reported that “China bought 42.5 billion
limit China’s future in grain output,” said Wang Xiaohui of cubic meters (bcm) of gas from overseas [in 2012]. at was
the China Grains and Oils Information Center, a government up more than 30 percent compared with 2011 and a nearly
think tank. “With a rising population and increased standard 10-fold increase from 2007.”41
As part of an e ort to blunt that reliance on foreign sourc-
* Support from the government may be too much: In December, 2010, U.S. led a complaint to WTO against the Chinese goverment’s subsidizing trade in
so-called environmentally friendly technology. is and other kinds of WTO disputes were discussed in Part I.
116
reportedly hopes to surpass Germany as the world’s largest of living we must ask who will feed Chinese people in the
solar energy market by 2013.27 future.”33
Ine cient transmission is said to be the biggest challenge It is been noted that due to these pressures, China’s adop-
to fully exploiting the bene ts of “green” power generation, tion of biofuels will be contingent on so-called “second gen-
however20 One project to address this concern is the State eration” products which are derived from non-grain sources
Grid Corporation of China’s plan to build a network of ultra- such as cellulose.33 Accordingly, the Ministry of Finance and
high-voltage (UHV) transmission lines by 2020.28 e rst the State Administration of Taxation co-issued the “Circular
part of this grid, an AC line linking Shanxi province to Jing- to Clarify the Application Scope of Consumption Tax Ex-
men city in Hubei province, was completed in 2009.29 emption for Pure Biodiesel Made from Waste Animal and
Plant Oils” (Caishui [2011] No. 46), which is expected to
A January 2011 Reuters report on the State Grid both incentivize legitimate biodiesel production while also
Corporation’s plans for UHV transmission lines indicated that preventing the illegal ‘recycling’ of restaurant waste oil: in
the company was “alone earmarking more than 500 billion 2010 it was reported that two to three million tons of swill-
yuan ($76 billion) to build 40,000 km of lines by 2015;”30 the cooked dirty oil were returned to dining tables every year in
State Grid Corporation itself reports that it plans to complete the PRC, seriously threatening the country’s food safety and
a total of 10 UHV projects by 2015 and 15 by 2020, with public health.34
a budgeted investment of approximately 1.6 trillion yuan
(signi cantly more than was earlier reported by Reuters).29 Oil’s importance to China’s development and the inevitable
increase in fuel consumption as more consumer purchase in
“Green” generation technology is also receiving automobiles remains a far more immediate concern than
government support*, including the requirement that all biofuels. According to Xinhua, the PRC ranked fth among
electricity generated by renewable methods must be purchased oil producing nations as of 200835, and remains the world’s
by the (state-owned) grid companies, and that the purchase second-largest oil consumer.36
of the same is to be supervised by the State Council Energy
Department and the State Power Regulatory Agency, with As of December 2008, the building of the second phase
the caveat that those parties, in addition to the State Council of China’s strategic oil reserves (rumored to hold up to ap-
Finance Department, are to “determine the proportion of proximately 170 million barrels, but still dwarfed by the U.S.
renewable energy power generation to the overall generating Strategic Petroleum Reserve, with its capacity of 700 million
capacity for a certain period.”20 barrels of crude oil) was con rmed.37
Despite such regulatory bene ts for renewable generation, e importance of this strategic reserve is highlighted
coal will likely continue to play the most important role in by the PRC’s heavy reliance on imports for consumption: a
power generation in the country: in 2009 Asian Development January 2010 article in China Daily noted that “Imported
Bank o cial Ashok Bhargava noted that “no matter how crude oil accounted for 52 percent of the country’s total oil
much renewable or nuclear is in the mix, coal will remain the consumption last year,” and that “Importing more than 50
dominant power source.”7 percent is a globally recognized energy security alert level.”38
Coal’s dominance will likely continue for the coming 40 to By May of that year, an article in the same publication
50 years, Ni Weidou of the Chinese Academy of Engineering more casually reported Sinopec o cials stating that “ e
told China Daily a year later.31 Coal consumption, however, is country may have to rely on imports to meet as much as 70
expected to draw from 70 percent of total energy consumption percent of its crude oil needs in the next decade,” although no
in 2009 to 63 percent in 2015, according to the National mention was made of energy security risks.39
Energy Administration.32
Over the course of 2010, the nation reportedly consumed
Despite international fashion, China’s use of biofuels can 440 million tons of oil, 200 million tons of which were im-
be expected to be much more sparing than other nations, as ported.40
China’s arable land and food supply demands leave little sur-
plus to—literally—burn. “Some analysts expect China to overtake the United States
as the world’s biggest crude oil importer as soon as 2017.”41
“Chinese agricultural products will continue to increase
yields and e ciency, but the lack of water and arable land will Similarly, it was reported that “China bought 42.5 billion
limit China’s future in grain output,” said Wang Xiaohui of cubic meters (bcm) of gas from overseas [in 2012]. at was
the China Grains and Oils Information Center, a government up more than 30 percent compared with 2011 and a nearly
think tank. “With a rising population and increased standard 10-fold increase from 2007.”41
As part of an e ort to blunt that reliance on foreign sourc-
* Support from the government may be too much: In December, 2010, U.S. led a complaint to WTO against the Chinese goverment’s subsidizing trade in
so-called environmentally friendly technology. is and other kinds of WTO disputes were discussed in Part I.
116
