China
What carbon neutrality means for the future of coal in China
Authors: Wei Li, Sydney University and Lei Zhang, Yanzhou Coal Mining Ltd
When President Xi Jinping committed China to achieving carbon neutrality by 2060 at the UN General Assembly, this was good news for many, including electric vehicle manufacturers and the renewable energies industries. One sector that stands to lose is the coal industry. The biggest contributor to greenhouse gas emissions in China, thermal coal accounts for almost 60 per cent of China’s energy mix, down from 80 per cent in 1990 and 70 per cent in 2010, but still more than double the global average.
Reducing reliance on coal power will be a major challenge because of its stability as a baseload power source, the relatively young age of China’s coal-fired powerplants, and the country being the largest producer, importer and consumer of coal.
But China’s motivation and ability to shift energy usage away from coal should not be underestimated, as accelerating reforms have shown. Recent coal industry reports coinciding with the gradual release of details from the 14th Five Year Plan confirm that radical restructuring is underway and carbon neutralisation is being rapidly integrated into China’s overall development plan.
State-owned companies carry out most coal mining and power production in China. The coal sector has been tackling overcapacity for a few years already. The number of coal mines shrunk from 12,000 in 2013 to 4700 in 2020, and employment in the coal mining and dressing industry has halved since 2013.
Mergers and acquisitions among state-owned coal mining companies have been encouraged. In 2017, Beijing approved the merger of coal company Shenhua Group with one of the nation’s big five state-owned power generators, China Guodian Corporation. The goal of such mergers and acquisitions is not to expand coal production capacity in China but to enhance cost effectiveness and efficiency.
According to a recent report by the China National Coal Association, ten super-large coal enterprises will emerge out of the consolidation in the next five years, each with an output of 100 million tonnes. Annual coal production will be controlled at a level of 4.1 billion tonnes by the end of the 14th Five Year Plan, compared with 3.9 billion tonnes in 2020. These mergers will allow China to improve national energy efficiency and increase the concentration of power generation.
Besides limiting production expansion and increasing efficiency, China is also slowing down coal consumption. As the government intensifies its war on pollution, the cost advantages of coal as an energy source will gradually shrink. Unlike most other developing countries, China has over the last decade established regulations and regulatory bodies down to the township-government level. This framework will help overcome the lack of enforcement and monitoring at the township level, with the central government forcing local leaders to make better decisions on natural resources usage, including coal.
China’s renewable energy industry is growing faster than capacity in fossil fuels and nuclear power generation. Booming industrial clusters have enabled China’s regional economic centres to emerge as world leaders in renewable energy and technologies such as electric vehicles. China is the world’s largest producer of solar and wind energy. In 2020, slightly less than 30 per cent of Chinese energy consumption came from non-fossil fuel output, including hydropower, wind, solar and biomass. By 2030, China plans to raise its minimum non-fossil fuel power purchase volume to 40 per cent.
Overseas Chinese mining investment is also transitioning away from thermal and fossil fuels to minerals relating to nuclear and renewable energy. In 2020, China Molybdenum acquired a 95 per cent stake in the Kisanfu copper-cobalt project in the Democratic Republic of Congo from US company Freeport. The deposit holds 6.3 million tonnes of copper and 3.1 million tonnes of cobalt. The acquisition will make China Molybdenum a top supplier of cobalt globally in the near future.
Ongoing frictions between Australia and China appear likely to impact seaborne coal shipments, as Chinese importers are somewhat reluctant to place orders for Australian thermal coal. Exports in 2020 were 199 million tonnes, declining by 6.1 per cent compared with 2019. Thermal coal exports to China were zero in January 2021, where average monthly exports were 4.5 million tonnes in the past.
For China, the gap left by Australian coal imports needs to be filled by other countries. Russia is planning to increase coal exports…
Business
China’s Golden Rooster Film Festival Kicks Off in Xiamen – Thailand Business News
The 2024 China Golden Rooster and Hundred Flowers Film Festival began in Xiamen on Nov 13, featuring awards, cultural projects worth 31.63 billion yuan, and fostering international film collaborations.
2024 China Golden Rooster and Hundred Flowers Film Festival Opens
The 2024 China Golden Rooster and Hundred Flowers Film Festival commenced in Xiamen, Fujian province, on November 13. This prestigious event showcases the top film awards in China and spans four days, concluding with the China Golden Rooster Awards ceremony on November 16.
The festival features various film exhibitions, including the Golden Rooster Mainland Film Section and the Golden Rooster International Film Section. These showcases aim to highlight the achievements of Chinese-language films and foster global cultural exchanges within the film industry.
On the festival’s opening day, a significant milestone was reached with the signing of 175 cultural and film projects, valued at 31.63 billion yuan ($4.36 billion). Additionally, the International Film and Television Copyright Service Platform was launched, furthering the globalization of Chinese film and television properties.
Source : China’s Golden Rooster film festival opens in Xiamen – Thailand Business News
China
Italy and China New DTA Set to Take Effect in 2025: Important Changes and Implications
Italy ratified an upgraded Double Tax Agreement (DTA) with China, effective in 2025, to reduce tax burdens, prevent evasion, and enhance investment. The DTA introduces modern provisions aligned with international standards, targeting tax avoidance and improving dispute resolution for Italian businesses.
Italy recently ratified the upgraded Double Tax Agreement (DTA), which will finally take effect in 2025. This agreement was signed in 2019 and was designed to reduce tax burdens, prevent tax evasion, and promote Italian investment in China.
On November 5, 2024, Italy’s Chamber of Deputies gave final approval to the ratification of the 2019 Double Tax Agreement (DTA) between Italy and China (hereinafter, referred to as the “new DTA”).
Set to take effect in 2025, the new DTA is aimed at eliminating double taxation on income, preventing tax evasion, and creating a more favorable environment for Italian businesses operating in China.
The ratification bill for the new DTA consists of four articles, with Article 3 detailing the financial provisions. Starting in 2025, the implementation costs of the agreement are estimated at €10.86 million (US$11.49 million) annually. These costs will be covered by a reduction in the special current expenditure fund allocated in the Italian Ministry of Economy’s 2024 budget, partially drawing from the reserve for the Italian Ministry of Foreign Affairs.
During the parliamentary debate, Deputy Foreign Minister Edmondo Cirielli emphasized the new DTA’s strategic importance, noting that the agreement redefines Italy’s economic and financial framework with China. Cirielli highlighted that the DTA not only strengthens relations with the Chinese government but also supports Italian businesses, which face increasing competition as other European countries have already established double taxation agreements with China. This ratification, therefore, is part of a broader series of diplomatic and economic engagements, leading up to a forthcoming visit by the President of the Italian Republic to China, underscoring Italy’s commitment to fostering bilateral relations and supporting its businesses in China’s complex market landscape.
The newly signed DTA between Italy and China, introduces several modernized provisions aligned with international tax frameworks. Replacing the 1986 DTA, the agreement adopts measures from the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project and the OECD Multilateral Instrument (MLI), targeting tax avoidance and improving dispute resolution.
The Principal Purpose Test (PPT) clause, inspired by BEPS, is one of the central updates in the new DTA, working to prevent treaty abuse. This clause allows tax benefits to be denied if one of the primary purposes of a transaction or arrangement was to gain a tax advantage, a move to counter tax evasion through treaty-shopping.
| This article was first published by China Briefing , which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, and India . Readers may write to info@dezshira.com for more support. |
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Business
China’s New Home Prices Stabilize After 17-Month Decline Following Support Measures
China’s new home prices fell for the 17th month in October, declining 0.5% from September, but slowing, indicating potential market stabilization amid supportive measures. Second-hand home prices showed mixed trends.
Decline in China’s Home Prices Stabilizes
China’s new home prices continued to decline in October for the 17th consecutive month, although the drop showed signs of slowing. Recent support measures from Beijing appear to be inching the market toward stabilization, as evidenced by a lighter decline compared to earlier months.
Monthly and Yearly Comparisons
According to the latest data from the National Bureau of Statistics, new home prices across 70 mainland cities fell by 0.5% from September, marking the smallest decrease in seven months. Year-on-year, prices dropped by 6.2%, slightly worse than the September decline of 6.1%. In tier-1 cities like Beijing and Shanghai, prices decreased by 0.2%, a smaller fall than 0.5% in the previous month.
Second-Hand Home Market Trends
Second-hand home prices in tier-1 cities experienced a 0.4% increase in October, reversing a 13-month downward trend. Conversely, tier-2 cities observed a 0.4% drop in second-hand prices, while tier-3 cities faced a similar 0.5% decline. Overall, recent trends indicate a potential stabilization in China’s property market.
Source : China’s new home prices slow 17-month decline after support measures kick in
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- China’s New Home Prices Stabilize After 17-Month Decline Following Support Measures
- U.S. national debt is its Achilles’ heel, but China sees it as an opportunity
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