Energy problems looming for ever-growing China
- Source: Global Times
- [21:00 February 08 2010]
- Comments
Lin Boqiang
Guan Qingyou
Editor's Note:
China established its National Energy Commission (NEC)recently, indicating that the country is paying more attention to energy security. Will the new commission improve China's energy situation? How should China develop renewable energy resources? Global Times (GT) reporter Li Yanjie talked with Lin Boqiang (Lin), director of the China Center for Energy Economics Research at Xiamen University, and Guan Qingyou (Guan), a concurrent researcher at the Center for China Study at Tsinghua University, on these issues.
GT: What problems exist in China's energy management system?
Lin: Current energy problems are more complicated than before. In the past, energy problems were only concerned with energy itself, but now energy problems are always linked to the environment and other issues, and thus cause price reform contradictions and other problems.
Therefore it's more difficult to manage energy now. I think the current National Energy Bureau (NEB) performs well so far.
China's various energy and energy problems are also related to different government agencies. Problems concerning environment are under the State Environmental Protection Administration, while if China's energy corporations want to go global, they need the help of the Ministry of Foreign Affairs. A single government department can't manage it well now.
Guan: The biggest problem is that energy issues are managed by different departments.
The NEC aims at building up a coordinated system among different departments.
GT: What's your ideal energy management department?
Lin: China has established various departments managing energy.
First is the former National Energy Comission established in 1980 and abolished two years later, then there was the Ministry of Energy established in 1988 and abolished in 1993, then the National Energy Office established in 2005, then the National Energy Bureau, and now we have the NEC.
Some of them were dismissed because at that time, they seemed to be unnecessary. Now energy problems are growing complicated and the need for low-carbon development has given energy issues even more importance and complexity.
Guan: Energy is a basic issue for any country and it is related to many enterprises and government departments. That's why China has established and abolished many different energy departments. I think energy issues can't be managed well by a single department. The new NEC is a good choice for China.
GT: Can the new NEC improve the current management problems?
Lin: The new NEC works as a planner and a coordinator to manage cooperation between different government departments. It's been established as a formal government department, showing that China is emphasizing energy and low-carbon development.
Guan: The NEB couldn't manage many issues around energy due to its limited power. The new NEC includes many top leaders of various ministries and thus will perform better, although it can't achieve ideal results.
GT: Will the NEC resolve the contradictions over the price reform of energy?
Lin: The establishment of the NEC will be good for China's energy reforms. The NEB doesn't have the right to set and change the prices of energy, which is determined by the National Development and Reform Commission (NDRC).
The new NEC is at a level higher than both NDRC and the NEB in the hierarchy of power, and the NEC includes ministers from all the important ministries that are concerned with energy issues.
A coordinating group will surely make it easy and quick for all concerned departments to work together on this problem. But don't expect that the price reform will be achieved quickly after the NEC was established.
Guan: Price reform is a long-term strategy. For China's energy enterprises, the price system and management system are two major problems. The current monopoly by State-owned enterprises is caused by administrative power.
The State-owned enterprises were not strong enough at the beginning of the reform and opening-up, therefore the government invested a lot of money in them and issued supportive polices.
I don't think splitting up these enterprises would be a good solution and it's impossible under the current situation in China.
A monopoly is not the best choice, but we lack any better solution at the moment. Maybe in the future we can gradually introduce private capital into the energy industry.
