Page 198 - 2017 White Paper
P. 198
7 White Paper on the Business Environment in China
Over the course of 2009, six types of fees for road Another researcher later told Reuters that the new
maintenance and management were abolished and tax system “would shift profits from companies to
revenue from fuel consumption tax was reported to governments in poorer provinces” (Hua and Chen 2011).
exceed 355 billion yuan (Xinhua 2009c).
Cleaner Gasoline Production
In a notable move in mid-December 2015, the National
Development and Reform Commission announced that, In September 2013 it was reported that Sinopec would
despite the drop in international oil crude prices, they begin producing cleaner gasoline ahead of the January
would be suspending the downward price adjustment of 2014 regulatory deadline enforcing a new cleanliness
domestic refined oil products in an effort to combat air standard named “National IV” (Reuters 2013b).
pollution. In a statement issued by Xinhua, the NDRC said:
“Giving full play to the leverage effect of refined oil prices The new standard, which was announced in 2011 and
is an important way to promote energy conservation and is described as similar to Europe’s “Euro IV”, puts a 50 parts-
tackle air pollution”. The mechanism, which took effect in per-million upper limit on sulphur content in gasoline.
March 2013, was instituted to reflect the corresponding Prior to implementation, the ceiling had been at 150 parts-
adjustment in the price of refined oil products when per-million (Reuters 2013b).
international crude oil prices translate into a change of
more than RMB 50 per ton for gasoline and diesel prices A “National V” standard mandating a maximum sulphur
within a period of 10 working days. With auto emissions content of 10 parts-per-million, is being rolled out in major
being one of the major reasons for pollution, NDRC has cities and will likely be adopted nationally in the coming
expressed its commitment to maintain steady domestic years; these limits are all expected to help “clear up the
prices for refined products so that less oil will be consumed, smoggy air of Chinese cities” (Reuters 2013b).
leading to an improvement in environment and air quality
(Xinhua 2015c). In September 2013, China’s National Development and
Reform Commission (NDRC) announced a new pricing
Resource Tax Pilot and Expansion policy for China’s higher quality fuels. Per the NDRC, prices
of China IV gasoline and diesel (50ppm sulfur content)
In July 2010, the NRDC indicated that it would expand increased by 290 and 370 yuan/ton, respectively. The
the resource tax pilot program introduced a month prior prices of China V gasoline and diesel (10ppm) increased a
in the Xinjiang Uighur autonomous region to “all 12 of the further 170 and 160 yuan/ton, respectively (Wagner 2013).
western provinces and autonomous regions”(Wang 2011).
This program was later reported to be planned to be put The International Council on Clean Transportation
into effect nationwide by November 1, 2011 (Hua and (ICCT) noted that“The new pricing changes were designed
Chen 2011). to encourage and assist China’s refineries to meet the fuel
quality improvement timeline announced by the State
This tax, which will reportedly be based on price Council earlier this year. That timeline calls for nationwide
of commodities rather than their volume, will have supply of China IV gasoline by the end of 2013, China
a benchmark rate of 5 percent and will vary by item IV diesel by the end of 2014, and China V gasoline and
(including oil, natural gas, coal and water). diesel by the end of 2017”. The pricing changes,’ the ICCT
observed, “appear to be the first steps in implementing
Furthermore, the list of taxable resources was widened State Council calls in October 2011 and February 2013 to
from its original scope to include rare earths, salts and use progressive fiscal policy to encourage the supply of
metals (Hua and Chen 2011). higher quality fuels” (Wagner 2013).
A China Daily-quoted analyst suggests that the new The ICCT stressed the significance of the NDRC
tax was “definitely [benefiting] the nation’s plans for announcement having included “an entire paragraph
sustainable growth by discouraging the exploitation on the importance of and mechanisms for ensuring
of resources”, and that “it will also help to solve the compliance and enforcement of the fuel quality” and
developmental imbalances in different regions by noted that “combined with the price increases, this further
boosting local fiscal revenues” (Wang 2011). underscores the Chinese government’s deep commitment
to ensuring the fuel quality timeline is met and
198
Over the course of 2009, six types of fees for road Another researcher later told Reuters that the new
maintenance and management were abolished and tax system “would shift profits from companies to
revenue from fuel consumption tax was reported to governments in poorer provinces” (Hua and Chen 2011).
exceed 355 billion yuan (Xinhua 2009c).
Cleaner Gasoline Production
In a notable move in mid-December 2015, the National
Development and Reform Commission announced that, In September 2013 it was reported that Sinopec would
despite the drop in international oil crude prices, they begin producing cleaner gasoline ahead of the January
would be suspending the downward price adjustment of 2014 regulatory deadline enforcing a new cleanliness
domestic refined oil products in an effort to combat air standard named “National IV” (Reuters 2013b).
pollution. In a statement issued by Xinhua, the NDRC said:
“Giving full play to the leverage effect of refined oil prices The new standard, which was announced in 2011 and
is an important way to promote energy conservation and is described as similar to Europe’s “Euro IV”, puts a 50 parts-
tackle air pollution”. The mechanism, which took effect in per-million upper limit on sulphur content in gasoline.
March 2013, was instituted to reflect the corresponding Prior to implementation, the ceiling had been at 150 parts-
adjustment in the price of refined oil products when per-million (Reuters 2013b).
international crude oil prices translate into a change of
more than RMB 50 per ton for gasoline and diesel prices A “National V” standard mandating a maximum sulphur
within a period of 10 working days. With auto emissions content of 10 parts-per-million, is being rolled out in major
being one of the major reasons for pollution, NDRC has cities and will likely be adopted nationally in the coming
expressed its commitment to maintain steady domestic years; these limits are all expected to help “clear up the
prices for refined products so that less oil will be consumed, smoggy air of Chinese cities” (Reuters 2013b).
leading to an improvement in environment and air quality
(Xinhua 2015c). In September 2013, China’s National Development and
Reform Commission (NDRC) announced a new pricing
Resource Tax Pilot and Expansion policy for China’s higher quality fuels. Per the NDRC, prices
of China IV gasoline and diesel (50ppm sulfur content)
In July 2010, the NRDC indicated that it would expand increased by 290 and 370 yuan/ton, respectively. The
the resource tax pilot program introduced a month prior prices of China V gasoline and diesel (10ppm) increased a
in the Xinjiang Uighur autonomous region to “all 12 of the further 170 and 160 yuan/ton, respectively (Wagner 2013).
western provinces and autonomous regions”(Wang 2011).
This program was later reported to be planned to be put The International Council on Clean Transportation
into effect nationwide by November 1, 2011 (Hua and (ICCT) noted that“The new pricing changes were designed
Chen 2011). to encourage and assist China’s refineries to meet the fuel
quality improvement timeline announced by the State
This tax, which will reportedly be based on price Council earlier this year. That timeline calls for nationwide
of commodities rather than their volume, will have supply of China IV gasoline by the end of 2013, China
a benchmark rate of 5 percent and will vary by item IV diesel by the end of 2014, and China V gasoline and
(including oil, natural gas, coal and water). diesel by the end of 2017”. The pricing changes,’ the ICCT
observed, “appear to be the first steps in implementing
Furthermore, the list of taxable resources was widened State Council calls in October 2011 and February 2013 to
from its original scope to include rare earths, salts and use progressive fiscal policy to encourage the supply of
metals (Hua and Chen 2011). higher quality fuels” (Wagner 2013).
A China Daily-quoted analyst suggests that the new The ICCT stressed the significance of the NDRC
tax was “definitely [benefiting] the nation’s plans for announcement having included “an entire paragraph
sustainable growth by discouraging the exploitation on the importance of and mechanisms for ensuring
of resources”, and that “it will also help to solve the compliance and enforcement of the fuel quality” and
developmental imbalances in different regions by noted that “combined with the price increases, this further
boosting local fiscal revenues” (Wang 2011). underscores the Chinese government’s deep commitment
to ensuring the fuel quality timeline is met and
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