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6 White Paper on the Business Environment in China
plementation, the ceiling had been at 150 parts-per-million.72 by more than half since mid-last year due to a rising supply, the
A “National V” standard mandating a maximum sulphur commission said traders will only be allowed to set prices at or
up to 20% below the benchmarks between November 20th this
content of 10 parts-per-million, is being rolled out in major cit- year and the year after. 75
ies and will likely be adopted nationally in the coming years;
these limits are all expected to help “clear up the smoggy air of Focus on Clean Energy
Chinese cities.”72 In early December 2015, the State Council announced their
goal to upgrade coal-fired power plants to cut pollutant dis-
In September 2013, China’s National Development and Re- charge by 60% before 2020, saving around 100 million tons of
form Commission (NDRC) announced a new pricing policy raw coal and reducing carbon dioxide emissions by 180 million
for China’s higher quality fuels. Per the NDRC, prices of China tons annually. According to the statement released by the na-
IV gasoline and diesel (50ppm sulfur content) increased by 290 tion’s Cabinet, China aims by 2020 to shut down plants that fail
and 370 RMB/ton, respectively. The prices of China V gasoline to meet the energy-saving standard. By 2017, the nation aims to
and diesel (10ppm) increased a further 170 and 160 RMB/ton, cut total coal consumption to below 65% of its total primary en-
respectively.73 ergy use as part of adjustments to its energy structure. The 2013
Air Pollution Prevention and Control Action Plan pledged to
The International Council on Clean Transportation increase clean energy supply and cut coal consumption, a major
(ICCT) noted that “The new pricing changes were designed to source of air pollutant emissions.76
encourage and assist China’s refineries to meet the fuel quality China is set to become a global nuclear energy player with
improvement timeline announced by the State Council earlier its possession of 110 operational nuclear reactors by 2030. Pow-
this year. That timeline calls for nationwide supply of China IV er Construction Corp of China Ltd – also known as PowerChi-
gasoline by the end of 2013, China IV diesel by the end of 2014, na – said exports of indigenous technologies are to be a “key
and China V gasoline and diesel by the end of 2017.” The pric- thrust” in the nation’s 13th Five-Year Plan (2016-20), with the
ing changes,’ the ICCT observed, “appear to be the first steps in total scale of nuclear power generation from reactors both un-
implementing State Council calls in October 2011 and Febru- der construction and in operation in the country reaching 88
ary 2013 to use progressive fiscal policy to encourage the supply gigawatts by the end of 2020. Though it is only a draft proposal,
of higher quality fuels.”73 the State-owned firm said it will “set the tone during the annual
legislative and political advisory sessions in 2016.” Nuclear is set
The ICCT stressed the significance of the NDRC announce- to be one of the major beneficiaries of China’s embarking on a
ment having included “an entire paragraph on the importance clean energy drive to reduce emissions; at the same time, China
of and mechanisms for ensuring compliance and enforcement is also looking to popularize its homegrown pressurized-wa-
of the fuel quality” and noted that “combined with the price in- ter nuclear technology known as Hualong One both at home
creases, this further underscores the Chinese government’s deep and abroad. China National Nuclear Corp chairman Sun Qin
commitment to ensuring the fuel quality timeline is met and said: “Third-generation nuclear technology meets the highest
commensurate air quality improvements are achieved.”73 requirements for global safety standards and has a competitive
edge over others in terms of economic performance and reli-
Natural Gas Price Liberalization ability.” 77
In what is being referred to as “a major step” in the country’s A forecast from the China Association of Automobile
reform to marketize energy prices, Beijing in November 2015 Manufacturers (CAAM) sees China’s electric car market
cut mainland China’s natural gas wholesale price by an average surpassing the US to rank first worldwide, with car sales expected
28% and announced that it was giving up much of its control to reach 220,000 to 250,000 for 2015. Deputy secretary-
over price setting. Benchmark non-residential gas prices at city general Xu Yanhua of CAAM said worldwide electric car sales
gates, where ownership transfers from producers to distributors, will hit 600,000 and the figure for the US market is estimated to
were slashed by RMB 0.7 per cubic meter starting on November be 180,000: “Although China has achieved rapid development
20th. A statement from the National Reform and Development of the industry,” Xu said at an industry conference, “quality
Commission read: “Since the nation last [adjusted prices] on instead of quantity should be focused on for the sustainable
April 1st, gas demand and supply both in and outside the development of the industry.” In particular, Xu emphasized
nation has changed markedly…the nation has decided to take vehicle safety and the careful examination/supervision of
advantage of this opportunity to sharply lower non-residential battery quality. In part thanks to extensive government
prices and further push forward price liberalization.” 75 subsidies and tax cuts, China’s new energy vehicle sector has
Aside from cutting prices, the NDRC said it would allow seen explosive growth over the past two years: According to data
buyers and sellers negotiate and set their prices from November
20th next year, as long as they agree on prices no more than 20%
above or below the benchmark prices. Due to low international
prices, with both crude oil and natural gas prices having fallen
140
plementation, the ceiling had been at 150 parts-per-million.72 by more than half since mid-last year due to a rising supply, the
A “National V” standard mandating a maximum sulphur commission said traders will only be allowed to set prices at or
up to 20% below the benchmarks between November 20th this
content of 10 parts-per-million, is being rolled out in major cit- year and the year after. 75
ies and will likely be adopted nationally in the coming years;
these limits are all expected to help “clear up the smoggy air of Focus on Clean Energy
Chinese cities.”72 In early December 2015, the State Council announced their
goal to upgrade coal-fired power plants to cut pollutant dis-
In September 2013, China’s National Development and Re- charge by 60% before 2020, saving around 100 million tons of
form Commission (NDRC) announced a new pricing policy raw coal and reducing carbon dioxide emissions by 180 million
for China’s higher quality fuels. Per the NDRC, prices of China tons annually. According to the statement released by the na-
IV gasoline and diesel (50ppm sulfur content) increased by 290 tion’s Cabinet, China aims by 2020 to shut down plants that fail
and 370 RMB/ton, respectively. The prices of China V gasoline to meet the energy-saving standard. By 2017, the nation aims to
and diesel (10ppm) increased a further 170 and 160 RMB/ton, cut total coal consumption to below 65% of its total primary en-
respectively.73 ergy use as part of adjustments to its energy structure. The 2013
Air Pollution Prevention and Control Action Plan pledged to
The International Council on Clean Transportation increase clean energy supply and cut coal consumption, a major
(ICCT) noted that “The new pricing changes were designed to source of air pollutant emissions.76
encourage and assist China’s refineries to meet the fuel quality China is set to become a global nuclear energy player with
improvement timeline announced by the State Council earlier its possession of 110 operational nuclear reactors by 2030. Pow-
this year. That timeline calls for nationwide supply of China IV er Construction Corp of China Ltd – also known as PowerChi-
gasoline by the end of 2013, China IV diesel by the end of 2014, na – said exports of indigenous technologies are to be a “key
and China V gasoline and diesel by the end of 2017.” The pric- thrust” in the nation’s 13th Five-Year Plan (2016-20), with the
ing changes,’ the ICCT observed, “appear to be the first steps in total scale of nuclear power generation from reactors both un-
implementing State Council calls in October 2011 and Febru- der construction and in operation in the country reaching 88
ary 2013 to use progressive fiscal policy to encourage the supply gigawatts by the end of 2020. Though it is only a draft proposal,
of higher quality fuels.”73 the State-owned firm said it will “set the tone during the annual
legislative and political advisory sessions in 2016.” Nuclear is set
The ICCT stressed the significance of the NDRC announce- to be one of the major beneficiaries of China’s embarking on a
ment having included “an entire paragraph on the importance clean energy drive to reduce emissions; at the same time, China
of and mechanisms for ensuring compliance and enforcement is also looking to popularize its homegrown pressurized-wa-
of the fuel quality” and noted that “combined with the price in- ter nuclear technology known as Hualong One both at home
creases, this further underscores the Chinese government’s deep and abroad. China National Nuclear Corp chairman Sun Qin
commitment to ensuring the fuel quality timeline is met and said: “Third-generation nuclear technology meets the highest
commensurate air quality improvements are achieved.”73 requirements for global safety standards and has a competitive
edge over others in terms of economic performance and reli-
Natural Gas Price Liberalization ability.” 77
In what is being referred to as “a major step” in the country’s A forecast from the China Association of Automobile
reform to marketize energy prices, Beijing in November 2015 Manufacturers (CAAM) sees China’s electric car market
cut mainland China’s natural gas wholesale price by an average surpassing the US to rank first worldwide, with car sales expected
28% and announced that it was giving up much of its control to reach 220,000 to 250,000 for 2015. Deputy secretary-
over price setting. Benchmark non-residential gas prices at city general Xu Yanhua of CAAM said worldwide electric car sales
gates, where ownership transfers from producers to distributors, will hit 600,000 and the figure for the US market is estimated to
were slashed by RMB 0.7 per cubic meter starting on November be 180,000: “Although China has achieved rapid development
20th. A statement from the National Reform and Development of the industry,” Xu said at an industry conference, “quality
Commission read: “Since the nation last [adjusted prices] on instead of quantity should be focused on for the sustainable
April 1st, gas demand and supply both in and outside the development of the industry.” In particular, Xu emphasized
nation has changed markedly…the nation has decided to take vehicle safety and the careful examination/supervision of
advantage of this opportunity to sharply lower non-residential battery quality. In part thanks to extensive government
prices and further push forward price liberalization.” 75 subsidies and tax cuts, China’s new energy vehicle sector has
Aside from cutting prices, the NDRC said it would allow seen explosive growth over the past two years: According to data
buyers and sellers negotiate and set their prices from November
20th next year, as long as they agree on prices no more than 20%
above or below the benchmark prices. Due to low international
prices, with both crude oil and natural gas prices having fallen
140
