Effect Analysis of De-overcapacity Policy in China's Coal Industry

Me SONG, Xuguang Hao

Abstract


Due to the predicament of coal industry’s serious production overcapacity, sharp drop in coal price and general loss for coal enterprises, China fully implemented de-overcapacity policy in 2016, which is also the core task for government to promote "supply-side structural reform". This paper presents an overall analysis of closed coal mines’ spatial distribution, nature and employees situation. Along with elimination of a large amount of backward production capacity, contradiction between supply and demand has been eased. In 2016, China’s coal production was 3.364 billion tons with a decrease of 10.22% year on year. Coal price has risen and tend to stabilize, the Bohai Rim 5500 kcal thermal coal price index increased from 371 yuan/ton at the beginning of 2016 to around 600 yuan/ton at the end of the year and stabilized at 580 yuan/ton in 2017. Industry concentration was significantly improved with CR4 and CR8 increased from 17.38% and 25.04% in 2010 to 25.72% and 38.50% respectively in 2017. In 2017, the death rate per million tons of coal dropped from 0.293 in 2013 to 0.106 and China coal industry’s international competitiveness has been obviously enhanced with occupying 21 seats among the top 30 global coal enterprises, far ahead of other countries. Finally, this paper puts forward specific proposals for advancing the reform of coal industry in China in terms of scientifically formulating capacity-reduction targets, optimizing production layout, and improving the de-overcapacity mechanism.

Keywords


Coal Industry, De-overcapacity Policy, Effect Analysis, Industry Concentration, Competitiveness


DOI
10.12783/dteees/iceee2018/27825

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