Page 210 - 2018 White Paper on the Business Environment in China
P. 210
8 White Paper on the Business Environment in China
Gold Council the improvement was mainly on the back a share of domestic demand are estimated to decline
of investment purchases in the West as physical demand from 5.5 percent in 2012 to 4.6 percent in 2017. It鈥檚 hard
from top consumers China and India fell (Els). to enter the coal mining industry in China. However, it is
possible for new players to enter the market as relatively
China is the leader in mining gold, zinc, lead, small enterprises, despite the costs and government
molybdenum, iron ore, coal, tin, tungsten, rare earths, regulations. Most of the coalmines that can be easily
graphite, vanadium, antimony and phosphate, and holds developed have already been done so. Large firms mostly
second place in mine production of copper, silver, cobalt, own the large and high-quality coal beds. Coalmines
bauxite/alumina and manganese. The only two main are controlled by the state, which cannot be exploited
produced commodities of which China is out of the top without the approval and planning of the government.
10 are gem diamonds and chromium. This remarkable Therefore, finding a coalmine that is profitable to exploit
accomplishment by China鈥檚 mining industry raises is fairly difficult. China requires firms to obtain the right to
questions regarding its ability to maintain its leading mine and six different licenses to do so to ensure national
position for the longer term, keeping in mind that China鈥檚 energy security (IBISWorld).
growing economy remains thirsty for sustainable supplies
of raw materials. In order to overcome shortages of Coal output rebounded by April 2017 as economic
essential mineral commodities, as well as to secure long- growth accelerated power use in the world鈥檚 largest
term sustainable supplies for its ambitious economic energy user. Coal output rose almost 13 percent to average
development strategy, the government of China entitled 9.67 million tons a day, the highest daily level since
a number of local state-owned and private companies December [2016], according to Bloomberg calculations
to actively pursue mining deals throughout the world. based on the data. 鈥淐hina鈥檚 fundamental demand for
According to the most recent Ernst & Young report, coal and natural gas has improved alongside better-
Chinese buyers topped the list of acquirers by value. than-expected economic growth in the first quarter,鈥�
Undoubtedly, the market will continue to witness more North Square Blue Oak Analyst Tian Miao said. 鈥淭he
mining merger and acquisition deals led by Chinese government鈥檚 investment in infrastructure has boosted
corporations, keeping in mind the relentless expansion of power consumption while the move to replace coal with
China鈥檚 economy combined with favorable conditions for gas to fight pollution is also gaining some traction for gas
assets acquisition due to lower commodity prices (Basov). demand鈥� (Yang). China鈥檚 energy structure continued to
improve in the first half of 2017 as the country consumed
Coal more clean energy amid a government campaign for
greener growth. Coal consumption, which stood at
According to the energy sector鈥檚 Five Year Plan for around 1.83 billion metric tons in the first six months,
2016-2020, China aims to bring the share of coal in the accounted for 59.8 percent of the overall energy use
country鈥檚 energy mix down to below 58 percent. By 2020, during the period, down 0.6 percentage points from the
China鈥檚 total energy consumption will be capped at 5 same period last year, according to Li Fulong, an official
billion tons of coal equivalent, representing an annual with the National Energy Administration.
rise of about 2.5 percent between 2016 and 2020. The
share of non-fossil fuels will rise to more than 15 percent According to the Center for American Progress, China鈥檚
and the share of natural gas should reach 10 percent, coal sector is undergoing a massive transformation that
according to the plan (Song, China鈥檚 Energy Structure). extends from the mines to the power plants. In their essay
鈥淓verything You Think You Know about Coal in China is
According to IBISWorld, revenue for the coal mining Wrong,鈥� researchers Hart, Bassett and Johnson claimed
industry in China declined 9.9 percent to $250.2 billion in from a climate perspective that the ideal scenario would
2016. Revenue fell over the previous five-year period due be for China to shut down all of its coal-fired power
to the substitution of energy from coal for cleaner energy plants and switch over to clean energy full stop. In reality,
sources, decreasing coal prices, and competition from however, China鈥檚 energy economy is a massive ship that
lower-priced imported coal. Raw coal output in China is cannot turn on a dime. The shift toward renewables
expected to decrease from 3.65 billion tons in 2012 to 3.27 is happening: China鈥檚 Paris commitment includes a
billion tons in 2017. During the same period, spending promise to install 800 gigawatts to 1,000 gigawatts of
on imported coal has been declining an average of 16.7% new renewable capacity by 2030, an amount equivalent
annually, from $30.2 billion to $12.1 billion. Imports as to the capacity of the entire U.S. electricity system. While
210
Gold Council the improvement was mainly on the back a share of domestic demand are estimated to decline
of investment purchases in the West as physical demand from 5.5 percent in 2012 to 4.6 percent in 2017. It鈥檚 hard
from top consumers China and India fell (Els). to enter the coal mining industry in China. However, it is
possible for new players to enter the market as relatively
China is the leader in mining gold, zinc, lead, small enterprises, despite the costs and government
molybdenum, iron ore, coal, tin, tungsten, rare earths, regulations. Most of the coalmines that can be easily
graphite, vanadium, antimony and phosphate, and holds developed have already been done so. Large firms mostly
second place in mine production of copper, silver, cobalt, own the large and high-quality coal beds. Coalmines
bauxite/alumina and manganese. The only two main are controlled by the state, which cannot be exploited
produced commodities of which China is out of the top without the approval and planning of the government.
10 are gem diamonds and chromium. This remarkable Therefore, finding a coalmine that is profitable to exploit
accomplishment by China鈥檚 mining industry raises is fairly difficult. China requires firms to obtain the right to
questions regarding its ability to maintain its leading mine and six different licenses to do so to ensure national
position for the longer term, keeping in mind that China鈥檚 energy security (IBISWorld).
growing economy remains thirsty for sustainable supplies
of raw materials. In order to overcome shortages of Coal output rebounded by April 2017 as economic
essential mineral commodities, as well as to secure long- growth accelerated power use in the world鈥檚 largest
term sustainable supplies for its ambitious economic energy user. Coal output rose almost 13 percent to average
development strategy, the government of China entitled 9.67 million tons a day, the highest daily level since
a number of local state-owned and private companies December [2016], according to Bloomberg calculations
to actively pursue mining deals throughout the world. based on the data. 鈥淐hina鈥檚 fundamental demand for
According to the most recent Ernst & Young report, coal and natural gas has improved alongside better-
Chinese buyers topped the list of acquirers by value. than-expected economic growth in the first quarter,鈥�
Undoubtedly, the market will continue to witness more North Square Blue Oak Analyst Tian Miao said. 鈥淭he
mining merger and acquisition deals led by Chinese government鈥檚 investment in infrastructure has boosted
corporations, keeping in mind the relentless expansion of power consumption while the move to replace coal with
China鈥檚 economy combined with favorable conditions for gas to fight pollution is also gaining some traction for gas
assets acquisition due to lower commodity prices (Basov). demand鈥� (Yang). China鈥檚 energy structure continued to
improve in the first half of 2017 as the country consumed
Coal more clean energy amid a government campaign for
greener growth. Coal consumption, which stood at
According to the energy sector鈥檚 Five Year Plan for around 1.83 billion metric tons in the first six months,
2016-2020, China aims to bring the share of coal in the accounted for 59.8 percent of the overall energy use
country鈥檚 energy mix down to below 58 percent. By 2020, during the period, down 0.6 percentage points from the
China鈥檚 total energy consumption will be capped at 5 same period last year, according to Li Fulong, an official
billion tons of coal equivalent, representing an annual with the National Energy Administration.
rise of about 2.5 percent between 2016 and 2020. The
share of non-fossil fuels will rise to more than 15 percent According to the Center for American Progress, China鈥檚
and the share of natural gas should reach 10 percent, coal sector is undergoing a massive transformation that
according to the plan (Song, China鈥檚 Energy Structure). extends from the mines to the power plants. In their essay
鈥淓verything You Think You Know about Coal in China is
According to IBISWorld, revenue for the coal mining Wrong,鈥� researchers Hart, Bassett and Johnson claimed
industry in China declined 9.9 percent to $250.2 billion in from a climate perspective that the ideal scenario would
2016. Revenue fell over the previous five-year period due be for China to shut down all of its coal-fired power
to the substitution of energy from coal for cleaner energy plants and switch over to clean energy full stop. In reality,
sources, decreasing coal prices, and competition from however, China鈥檚 energy economy is a massive ship that
lower-priced imported coal. Raw coal output in China is cannot turn on a dime. The shift toward renewables
expected to decrease from 3.65 billion tons in 2012 to 3.27 is happening: China鈥檚 Paris commitment includes a
billion tons in 2017. During the same period, spending promise to install 800 gigawatts to 1,000 gigawatts of
on imported coal has been declining an average of 16.7% new renewable capacity by 2030, an amount equivalent
annually, from $30.2 billion to $12.1 billion. Imports as to the capacity of the entire U.S. electricity system. While
210
