New Energy Live

Chinese Solar Photovoltaic Panel Businesses Are in a Dark Mood

2012-08-10T01:10:00.000-07:00

They deal in products that promise to efficiently deliver heat and light, but the mood of hundreds of Chinese solar companies is decidedly dark and cold at the moment.

Chinese solar companies, despite being hailed as one of China's biggest success stories of recent times, and as champions for their efforts in reducing carbon emissions, creating jobs and lowering technology costs, are struggling to weather the market turmoil caused by domestic oversupply and uncertain overseas markets.

After the United States ruled in May that China's solar panel makers were dumping goods and receiving unfair subsidies, a recent complaint about dumping panels in Europe - the largest market for Chinese-made solar panels - may push the once vibrant industry off the edge of the cliff.

The potential anti-dumping investigation in Europe, seeking higher tariffs on solar products made in China, is seen as the last straw for the Chinese solar photovoltaic manufacturers that heavily rely on overseas markets.

Only the best ones will survive the latest turmoil, experts and insiders say.

"It would be catastrophic for China's solar industry once the higher import tariff is in place," says Meng Xiangan, deputy director of the China Renewable Energy Society. "But it will not be the end of the story. Companies that focus on innovation and reducing cost will come out on top after the solar PV industry emerges from the turmoil."

The complaint was filed by a group of European solar panel makers late last month, and the European Commission has up to 45 days to decide if it will start an investigation. The case is at an early stage and it is too soon to predict a result, but any policy disruption in major markets will make it difficult for manufacturers and installers alike.

Michael Barker, an analyst with NPD Solarbuzz, an international solar energy market research and consulting company, says that if the EU does impose tariffs on Chinese solar products, it is likely to hit second and third-tier manufacturers more than the main ones.

"Tier-one module manufacturers have the ability to change supply arrangements to protect against anticipated charges caused by any decision from the European Commission, whereas smaller suppliers may not have this ability," he says.

But China's biggest solar companies are still fearful of the outcome.

After a joint news conference last month urging Beijing's support and Brussels to think long and hard before reaching a conclusion, the four top solar panel makers in China - Yingli Green Energy Holdings Co Ltd, Trina Solar Ltd, Canadian Solar Inc and Suntech Power Holdings - planned a worker protest on Aug 2 against the European solar panel makers' complaint.

Though the protest was called off due to bad weather, Chen Zhuo, Yingli Green Energy's legal director, said everything will be done to prevent the investigation. More than 50 percent of Yingli's sales are generated in Europe, Chen says.

China is the world's largest solar PV producer with more than half the world's total production. About 60 percent of China's $35.8 billion (28.9 billion euros) worth of solar panel exports last year was to Europe.

The European market is also crucial because the entire solar PV industry in China is going through a tremendously tough time at present, says Meng of China Renewable Energy Society.
The profit margins of most Chinese solar manufacturers have fallen since last year because of excess global solar cell capacity and the massive slowdown in demand from the end markets.

NPD Solarbuzz says the growth of the global solar PV industry dropped from 153 percent in 2010 to 22 percent last year, driven largely by reduced government incentives in many European markets.
Shipments from the US-listed Yingli Solar rose 44 percent in the first quarter of this year compared with the same period of last year, according to the company's quarterly financial report issued on May 30.

However, the company's gross margin fell to 7.8 percent in the first quarter, compared with 27.3 percent in the same period last year.

The market downturn has already dragged some Chinese solar makers into trouble, and the Jiangxi-based LDK Solar, one of the largest solar PV makers, is heading for bankruptcy.

Though China's domestic demand for solar cells has taken off, with the National Energy Administration resetting its original plan of 5 gigawatt accumulative installed capacity of solar power to 21 gW by 2015 in July, only a few experts say the growing demand in China can offset the impact by the shrinking EU market.

Shen Hongwen, a research specialist in new energy with the CIConsulting of Shenzhen, says it is simple mathematics. "China's production capacity for solar cells has grown to more than 40 gW a year. Even with the new target of 21 gW by 2015, China's domestic demand for solar power is about 4 gW a year."

Despite all the difficulties, Michael Carboy, head of China research with Deutsche Bank Climate Change Advisors, still sees the solar industry in China as promising.

"Greenhouse gas emissions, air pollution concerns, the need for more power to electrify both a growing economy and an expanding and wealthier middle-class are all strong motivations for China to continue nurturing the domestic solar sector," Carboy says.

China invested about $4 billion last year, he says. "We believe China will connect to the grid an incremental 30 gW or more of solar power in the period from 2010 to 2020. With approximately 2.5 gW of PV now installed in China at the end of 2011, the incremental investment needed to increase China's grid-connected PV capacity to 35 gW by 2020 might approximate 233 billion yuan ($36.6 billion, 29.6 billion euros) to 255 billion yuan if installed solar PV prices continue to decline at a compound average annual rate of 11.5 to 12 percent."

Meng of China Renewable Energy Society agrees, saying the solar industry in China is a strategic one. "There will be a rosy future ahead as long as companies that have focused on high-quality products and innovation make through it."

At Yingli Solar's plant in North China's Hebei province over the past two months, red banners with the slogans "Climbing up the solar PV snowy mountains" and "Crossing the solar PV meadows" have been highly visible.

The slogans to encourage its employees to weather the storm are inspired by the settings of the arduous Long March in the history of the People's Liberation Army.

Liang Tian, director of public relations with Yingli Green Energy, says: "We all know there is a rosy future. But no one can be sure how long we will have to wait before we get there."

System Built to Price Rare Earths in China

2012-08-10T01:05:00.002-07:00

China is to set up a national pricing system for rare earth metals within the next month, in addition to its new trading platform, to further regulate the industry and strengthen its control of the resources, essential materials in consumer electronics and other high-tech goods.

Speaking on Wednesday at the Rare Earth Industry Forum in Baotou, in the Inner Mongolia autonomous region, Ma Rongzhang, secretary-general of the China Rare Earth Industry Association, said the association will establish the pricing index with the aim of leveling out price volatility in the market.

The move, still awaiting approval, will also help the country be a stronger competitor in the international market, and play an important part in the sustainability of the sector, although no specific details were given.

The new rare earth trading platform was launched in Baotou.

North China's Inner Mongolia autonomous region is home to more than half of the world's light rare earth output.

The platform will be operated by the country's top rare earth producer, the Inner Mongolia Baotou Steel Rare-Earth (Group) High-Tech Co, as well as with nine other firms and institutions including the southern giants Xiamen Tungsten Co Ltd and Guangdong Rising Nonferrous Metals Group Co Ltd.

With a total investment of 100 million yuan ($15.7 million), each shareholder invested 10 million yuan and holds a 10 percent stake in the exchange.

Dudley Kingsnorth, a professor in energy and mineral economics at Curtin University in Western Australia, said he is supportive of the idea, and that it will improve transparency and help avoid volatility.

But he added that the supply of heavy rare earths will be the major concern of the industry in the future.

Chen Zhanheng, deputy secretary-general of the association, pointed out that some of China's rare earth products - traded, for instance, inside some southern provinces to avoid tax - might not necessarily be put onto the national trading platform, but that a stabilized price will benefit everyone.

He also suggested China stockpile more heavy rare earths instead of light rare earths, which are considered as being overproduced.

However, Huang Chang-geng, senior vice-president of Tungsten, said he was still unaware of any specific regulations and systems for the fledgling platform.

China produces 90 percent of all rare earths, while it has 23 percent of world resources, but many in the industry consider this as unsustainable.

The most urgent action is required on heavy rare earth supplies, said Alastair Metcalf, chief executive officer of Hastings Rare Metals Ltd in Australia.

He suggested that China secure stock from other countries for its processing plants, particularly Australia.

In July, the World Trade Organization formed a special group to investigate the issue of stockpiles after the European Union, the United States and Japan complained over what they claimed were Chinese export controls.

Rare earth exports this year are expected to drop to around 10,000 tons, much lower than the industry export quota of 31,000 tons.

In the first half of the year China exported no more than 5,000 tons of rare earths, said Ma. Last year, overall exports were 16,900 tons, about 56 percent of the country's export quota.

Ma said that indicates the rare earth export quota is not a barrier to overseas consumers importing rare earths from China.

Rare earth exports, according to statistics by Chinese customs, were 17.83 percent of its total output of 96,900 tons in 2011.

Smuggling is attributed as the main reason for the export fall, in addition to sluggish demand caused by rising prices, sufficient stockpiles from overseas consumers, and reduced market share of the US products, Ma said.

Rare earths, a group of 17 metals, are essential in the manufacture of high-tech products ranging from smartphones and wind turbines to electric car batteries and missiles.

China Oil Trader Agrees To Buy Titan As Suit Looms

2012-08-10T01:01:00.000-07:00

Chinese oil trader Guangdong Zhenrong Energy Co Ltd has agreed to take control of debt-laden shipping and oil storage firm Titan Petrochemicals Group Ltd, which is facing a liquidation suit from US private equity firm Warburg Pincus.

Zhenrong is controlled by Zhuhai Zhenrong Co, formerly affiliated with China's defence industry and now one of the country's five biggest traders of crude oil and oil products.

Under an agreement signed with Guangdong Zhenrong on Aug 1, loss-making Titan plans to issue 7 billion new shares for HK$175 million ($22.57 million) to the oil trader, Titan said in a filing with the Hong Kong bourse on Wednesday.

The new shares, to be issued at HK$0.025 each, would represent nearly 90 percent of Titan's enlarged share capital after the offer, it said.

But Zhenrong will seek to keep Titan listed by maintaining the company's public float at no less than 25 percent of its total share capital, Titan said, adding that the share issue would be subject to a number of conditions, including a dismissal of Warburg's liquidation suit.

Warburg Pincus - which has invested more than $215 million in Titan since 2007 - filed a petition in a Bermuda court last month seeking to wind up the company, which had assets of HK$6.4 billion at the end of last year while current liabilities reached HK$7.7 billion.

Warburg has also sued Titan and some of its executives in Hong Kong's High Court for misrepresentation and breach of contract.

Zhenrong has also agreed to pay up to $145 million to buy Warburg Pincus' interest in Titan's storage companies on the mainland and to provide the storage companies with interim financing of up to $40 million.

An acquisition would allow Zhenrong to make use of Titan's oil storage facilities in Guangdong, Fujian, Shanghai and Shandong in eastern China, a Guangdong Zhenrong official has said.

Titan has suffered losses for five consecutive years after its debt-driven growth strategy came undone during a steep downturn in the shipping industry.

Shares in Titan, which has a market value of $248 million, were suspended on June 19. The stock last traded at HK$0.246, after plunging 50 percent over the previous 12 months.

Energy Sectors Remain Major Focus of China's ODI

2012-08-10T00:57:00.002-07:00

Outbound direct investment made by China's energy and resources industries reached around $239 billion from 2005 to the first half of 2012, accounting for 71 percent of the country's ODI, according to a report issued Wednesday by Ernst & Young.
China's ODI skyrocketed from $10 billion in 2005 to nearly $73 billion in 2011, the report said.
In recent years, China has diversified its ODI from energy industries to the agriculture and technology sectors.

Eighty-two percent of China's ODI went to energy industries in 2009, but the proportion fell to 60 percent in the first half of this year.

However, outbound investment in the agriculture and technology sectors, which accounted for just 2 percent of total ODI in 2009, jumped to 17 percent in the first half, according to the report.

Many Chinese companies polled in the survey said they may take advantage of European economic woes by acquiring undervalued assets.

Thirty percent of companies polled pointed to Western Europe as their top investment destination, while 22 percent of companies saw the United States and Canada as best places to invest.

China Auto Market Sales Cool with Midsummer Dip

2012-08-10T00:55:00.000-07:00

The Chinese auto market did not escape the curse of "sluggish July" and has suffered a sales slump of nearly 10 percent from June.

European brands, however, provided a silver lining to the gloom.

Figures from the China Passenger Car Association show that last month, sales of sedans, sports utility vehicles, multipurpose vehicles and minivans collectively reached 1.04 million units, down 9.6 percent month-on-month, but up 8 percent year-on-year.

The combined sales figures for passenger cars in China during the first seven months of the year show a year-on-year increase of 5.8 percent to 8.05 million units.

Wang Hongchang from the China Automobile Dealers Association explains that July is the traditional slack season for selling cars, and the frequent storms in North China and sudden purchase restrictions in Guangzhou have exacerbated the situation.

"I think in August the market will witness a milder slide, and then the market should bounce back in September, based on my observation of previous years," he says.

Despite the recent sluggishness, the market grew modestly year-on-year, mostly because of the remarkable resilience of European brands.

Joint venture companies still rank high on the sales sheet, as anticipated, with FAW-Volkswagen leading the list with 106,544 units in July, followed by SAIC-GM with 97,064 units, and SGMW with 90,268 units. SGMW is a three-way joint venture involving SAIC, Liuzhou Wuling Motors Co and GM China.

The largest European automaker, Volkswagen Group, remained on the top perch. Besides FAW-Volkswagen, its other joint venture, SAIC-Volkswagen, sold 94,101 cars last month, up 21.9 percent on last year.

Volkswagen's premium car brand Audi has not released its sales figures in China yet. But in the US market in July, it sold 11,707 cars, a year-on-year increase of 28 percent, the highest in 19 months.

Driven by the strong demand from Chinese and Russian markets, German car manufacturer BMW sold 135,537 cars globally last month (including the Mini and Rolls-Royce brands), 5 percent higher than the previous July, while the accumulated sales during the first seven months reached 1.04 million units, up 7.6 percent.

The Chinese market is still the biggest engine for BMW's sales growth. In July, BMW Group delivered 23,092 cars in China, up by 22.5 percent.

Sales in the US, however, grew by only 4 percent.

Mercedes-Benz is the only major European automaker to report a sales drop last month. On Aug 3, the company announced that global sales in July went down by 3.1 percent to 97,323 units.
A consolation for the company is that the Chinese market is still growing and has great momentum. Last month, the Mercedes-Benz brand delivered 14,760 cars in China, a modest increase of 2 percent.
During the first seven months, the group (including Mercedes-Benz, Smart and Maybach) sold 119,980 cars in China, 10 percent more than the previous year.

But it seems that not all of these marquee names are getting along with their joint venture partners, despite reporting escalating sales.

At the end of last month, Volkswagen alleged that its Chinese partner FAW infringed its patents for the gearbox and engine, which was said by insiders to be the result of long-existing disagreements over technology transfer forms and stock share allocation between the partners.
In the mid-1980s, when the first foreign joint venture was introduced in China, the government trade-off was the Chinese market for foreign partners' advanced technologies. But after 30 years, more than half of the Chinese auto market belongs to foreign brands, and Chinese brands have not been catching up as quickly as the government expected on auto technologies.

But there was good news for Chinese brands in July. On the latest list of energy-saving cars (with engine size smaller than 1.6 liters) released on July 11, more than 100 models were selected, with about 60 percent being Chinese.

Consumers can get a 3,000 yuan ($472, 382 euros) subsidy from the government to buy these models, which may boost the sales of Chinese brands in the following months.

It seems that more favorable policies toward the car market are being lined up. Responding to criticism that highway tolls during holiday periods created serious congestion, the Chinese government issued a policy this month to exempt passenger cars with less than seven seats from tolls during major holidays, to take effect from the beginning of October. A total of 20 days in the year will be toll free.

Cui Dongshu, deputy secretary-general of the China Passenger Car Association, says this policy will significantly boost the sales of cars in August and September, when people are preparing for the Golden Week holiday at the beginning of October.

Shi Jianhua, deputy secretary-general of China Association of Automobile Manufacturers, says the Chinese auto market has switched from the high-speed lane to the steady-growth path.

He estimates the yearly growth rate of the market to be 8 percent, with the total vehicle delivery of 20 million. Since more families are buying second cars, mainly for leisure, Shi believes the SUV segment will surge by 30 percent to 2.07 million in 2012.

At the same time, he says, the instability of government policies has hurt the industry, especially the younger and newer Chinese brands.

The sudden announcement of a purchase restriction in Guangzhou at the end of June dismayed the whole industry, and stirred a buying frenzy among the South China city's residents.

Shi is apparently against these "raids" to rein in cities' congestion problems. "Instead of limiting the purchase, the government should pay more attention to city planning," he says.

Alstom Has Decided to Boost Hydro Power Investment in China

2012-08-10T00:48:00.001-07:00

Alstom, the world's third-largest power equipment maker, is boosting its investment in hydro power in China, as other renewable energy sectors such as wind and solar energy face a slowdown.

Alstom Renewable Power, Alstom's division in charge of renewable power generation equipment and services, plans to establish a Global Technology Center in Tianjin, as part of a 100 million euro ($123 million) investment to upgrade Tianjin's hydro industrial facility - the largest such plant that Alstom has in operation.

"Compared with other renewables, hydro power is very stable," said Jerome Pecresse, president of Alstom Renewable Power.

And as the renewable sector - including wind and solar - develops, the demand for pumped-storage plants will also increase, according to Pecresse.

Alstom is one of China's leading hydro producers. The company has contracts for hydro turbines and generators covering about 47 gigawatts, out of which about 50 percent are already in commercial operation.

Alstom was also involved in the construction of the Three Gorges Dam, the world's largest power plant of any kind, to which it supplied 14 of the dam's 32 units, each with an output of 700 megawatts.

"International hydro power companies are setting up their research and development centers in China to grab more market share, leading to fierce competition as well as more mergers and acquisitions," said Zhou Xiujie, an industry analyst with China Investment Consulting.

According to the China Electricity Council, the country's hydro power investment reached 44.4 billion yuan ($7 billion) in the first five months of the year, up nearly 50 percent year-on-year.

With a temporary slowdown in the construction of nuclear plants after the Fukushima disaster in Japan, the Chinese government is pushing ahead with all forms of renewable energy: solar, wind, bio-energy, geothermal and hydro.

However, the development of wind and solar energy is slowing down.

Authorities began tightening approval for wind power projects last year after a significant amount of wind resources were wasted because the grid was not capable of carrying or sending out the electricity.

Despite the government's ambitious push, the solar market in China is still very small, with less than 3 gW installed at the end of 2011.

In comparison, hydro power makes up 22 percent of the country's installed power base, with many large hydroelectric projects either in the planning stage or under construction. The country's hydro market is booming, with installed capacity for hydropower increasing by 15 gW every year, and expected to reach 380 gW by 2020 from just under 200 gW this year.

China plans to get 11.4 percent of its energy from renewable sources by 2015, of which hydro power will contribute two-thirds, analysts said.

In the first half of the year, the central government has approved six major dam projects totaling 8.8 gW, with another 10 gW in the pipeline by the end of the year, according to the National Development and Reform Commission.

China's hydropower capacity stood at 230 gW at the end of 2011, 22 percent of the total, and another 55 gW are now under construction, according to figures released by the National Energy Administration.

The country's hydro power market slowed down during the 11th Five Year Plan period (2006-10) partly due to controversy about its environmental impact. However, new approvals accelerated since 2010 when the reduction of carbon emissions was at the top of the government's agenda.

Meanwhile, the slowing economy may pose some challenges for hydro power development as demand for electricity is cooling down.

China Launches Rare Earth Trading Platform On Bigger Pricing Power

2012-08-10T00:38:00.001-07:00

China on Aug 8, 2012 launched a physical trading platform for rare earth metals as part of its efforts to regulate the sector and strengthen its pricing power for the resources.

The Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech Co., China's top rare earth producer, and nine other firms and institutions jointly launched the platform with a total investment of 100 million yuan (15.87 million U.S. dollars). Each shareholder invested 10 million yuan and holds a 10-percent stake in the exchange.

The rare earth trading platform is located in the city of Baotou in north China's Inner Mongolia Autonomous Region, home to more than half of the world's light rare earth output.

Previously, China's rare earth market was largely opaque, as transactions were not made in public markets and always ran in small volumes. Only limited amounts of pricing and transaction data have been made available to the public.

The opaque market and the fact that Chinese rare earth producers far outnumber foreign consumers have weakened China in terms of price negotiations with foreign consumers, industry analysts said.

Ma Pengqi, a rare earth expert and former director of the Baotou Rare Earth Research Institute, said the trading platform will provide clarity and give China more say in deciding rare earth prices.

Some analysts, however, questioned the exchange's effect on stabilizing prices.

Liang Xingfang, general manager of Baotou Ruixin Rare-Earth Metal Material Co., said the spot market's role in stabilizing rare earth prices is limited.

"We have to wait and see how the exchange will work in the future," he said.

As the world's largest producer of rare earth metals, China now supplies more than 90 percent of the global demand for rare earth metals, although its reserves account for just 23 percent of the world's total.

Rare earth metals, a group of 17 metals, are vital for manufacturing hi-tech products ranging from smart phones and wind turbines to electric car batteries and missiles.

Mining the metals greatly damages the environment. In recent years, China has come down heavily on illegal mining and smuggling, cut export quotas and imposed production caps, stricter emissions standards and higher resource taxes to control environmental damage and stave off resource depletion.

However, these measures have irked rare earth importers, who complained about rising prices and strained supplies.

The United States, Europe and Japan in March jointly filed a complaint to the World Trade Organization (WTO) against China's export policies on rare earths and two other metals. The WTO established a panel last month to investigate the complaints.

Zhu Hongren, chief engineer of the Ministry of Industry and Information Technology, said China would abide by any decision made by the WTO, but the country must continue to tighten regulation in the sector.

The launch of the trading platform coincided with a major annual industry conference, the Baotou China Rare Earth Industry (International) Forum.

Su Bo, vice minister of industry and information technology, repeated Zhu's statement at the two-day forum that opened Wednesday, saying China will continue to crack down on illegal mining and smuggling, promote industry consolidation and properly handle international trade frictions.

China's rare earth output fell 36 percent year on year to 40,000 tonnes in the first half of the year. Prices of major rare earth products in July remained twice as high as prices at the beginning of 2011, although down from the beginning of the year.

Luneng Group Of China To Sell 22% Stake In Hami Wind Power

2012-03-27T02:58:00.001-07:00

Shandong Luneng Group Co., Ltd. has listed for sale 22 % stake in Xinjiang Hami Guangheng New Energy Co., the listed price of 19.8268 million yuan.

Xinjiang Hami Guangheng New Energy Co., Ltd. was established on February 22, 2011, registered capital of 90 million yuan, the business scope includes: wind, photovoltaic farm construction; electrical energy processing; sale of electricity to the grid; to provide services for the power grid. June 30, 2011 as the base date of assessment, the assessed total assets of 90.3085 million yuan, net assets of 90.1218 million yuan, the transfer of the subject corresponding to the assessed value of 19.8268 million yuan.

The company is mainly focused on the operation of the first phase of the 49.5MW Hami 13-room wind farm project, and is expected to start the construction in March of this year, put into operation before December 31.

The total investment of the project is 449.4153 million yuan, and the construction period is one year.

The total installed capacity is of 49.5MW, with 33 1500 Model wind turbine installation, 2200 equipment power generation hours, and annual in-grid electricity generation of 10.89 million KWh.

Sinopec Makes Nearly 200 Million Yuan Per Day

2012-03-27T02:55:00.002-07:00

China's largest oil refiner Sinopec yesterday disclosed the year 2011 results, according to Chinese accounting standards, last year the company's net profit was of 71.697 billion yuan, only 1.4% growth over year 2010, which means Sinopec earned nearly 200 million yuan (1.96 billion yuan) last year, however, it was Sinopec performance growth of the worst year since year 2008.

Assets total 1.13 trillion yuan

Financial report data show that in year 2011 the purchased crude oil processing capacity was of 166.85 million tons, 73 % of its total crude oil processing volume. Last year the average international oil price was of $ 111.27 / barrel, increased by 40% over the previous year. Last year the refining business loss amounted to 37.6 billion yuan.

Annual report disclosed that the petrochemical industry access control is being relaxed

It is noteworthy that yesterday Sinopec disclosed in its annual report that the company also faced a number of macroeconomic policies and government regulatory risk.

For example: the Chinese government is to gradually relaxing the access regulation of the oil and petrochemical industry, but is still continuing the implementation of a certain degree of access control on the domestic oil and petrochemical industry, including: the issuance of the crude oil and gas exploration and production license; it also expressed that those were likely to have great adversely influence on the production, operation and efficiency of the company.

Currently Sinopec and PetroChina, CNOOC and several major oil companies almost monopolize the domestic oil and gas production and processing business.

During the "Two sessions", it is of widespread concerns of the implementation of the "new 36" rules to allow private enterprises to enter the petrochemical monopoly industry.

Chinese Watchdog to Say Lights Out to Polluters

2012-03-27T02:49:00.000-07:00

Residents kept awake by neon advertisements and bright landscape lighting should soon be able to enjoy a good night's sleep.

Legislation is being drawn up that will limit the hours these lights can be switched on and allow for those inappropriately placed to be removed.

Visual impact and energy-saving are being prioritized as the city's greenery bureau seeks more effective management of decorative lighting, said officials.

Standards detailing lighting up times will be available in the coming months. The new law is due to come into effect later this year.

Currently, a lack of clear regulations has made it difficult for the watchdog to intervene in disputes over decorative lights.

Zhu Zhiyu, a representative of concerned residents and a local political advisor, has proposed that the lights must be turned off before midnight, backed by fines.

The law will also grant the watchdog powers to order the removal of lights that are inappropriately positioned, said officials.

Officials said they are currently combing through complaints about landscape lighting.

Meanwhile, the watchdog said new light installation and renovation projects will not be licensed unless they meet energy-saving product criteria.

Time for Chinese Solar Firms to Tap New Markets

2012-03-27T02:46:00.002-07:00

In the face of rising trade frictions from the US and the EU, Chinese solar energy companies should explore new markets, especially the domestic market, said industry insiders at a conference in Beijing Friday.

The US Commerce Department announced on March 20 it would impose anti-subsidy duties on photovoltaic solar panels from China, ranging from 2.9 percent to 4.73 percent.

Shi Dinghuan, president of the China Renewable Energy Society, said China opposed to the duties from the very beginning of the investigation, and the US' move is unfair and is against the tide at a time when the world is fighting climate change.

Shi said that as most of the equipment and raw materials in China's solar energy industry are imported from the US, levy of duties will not only harm Chinese manufacturers, but also US suppliers.

Dave Renne, president of International Solar Energy Society (ISES) said the duties were better than previously concerned, as the US government is listening to the urge of the industry, and the outcome was out of political choice.

Removal of trade barriers is crucial to the development of the industry, said Renne. However, he warned of the results of the US' anti-countervailing duties to be released in May.

Most players in the industry don't want to see trade tensions between China and US, as there is much collaboration between the two countries in this industry, said Monica Oliphant, former president of the ISES.

Impact of the duties this time would be relatively low, as the US doesn't want to upset the Chinese industry, she said. Oliphant explained that it is just to satisfy some industry players who want to protect themselves.

What she is concerned that if duties go up, there would be a flood of cheaper and affordable systems in the market instead of good and efficient but expensive ones, and that would harm the industry as a whole.

China produces 50 percent of the photovoltaic products in the Asia-Pacific region, with 95 percent of its overall output exported outside of the country, according Oliphant.

Therefore, she suggests Chinese solar firms pay more attention to the domestic market as well as the Asia-Pacific region, where there would be less protectionism and smaller duties.

Li Yuanpu, director of the Geothermal Heat Pump Committee at China Renewable Energy Society (CRES), agrees with this idea. He said his organization is helping solar companies with legal assistance, as well as exploring possible markets in ASEAN countries, Australia, and Africa.

As the PV is not grid-friendly to China's centralized grid system, the CRES is studying the decentralized grid system of Germany, which enables solar module installers to be the direct end users of the power generated.

Shi of the CRES refuted the view that there is an overcapacity in the industry, stressing that the installed capacity of China's solar energy is less than 10 million kW, and is far away from replacing fossil fuels. He added that a clarified government's policy for the solar electricity price is the key for solar firms to explore the domestic market.

BYD Reports Deep Decline in Profits on Waning Battery Biz

2012-03-27T02:42:00.002-07:00

Chinese battery and carmaker BYD Co Ltd reported on Sunday that it saw a record decrease in its profits and vehicle sales in its 2011 financial year, which ended on Dec 31.

That aroused concerns that the company will have a difficult time achieving its goal of having the most automobile sales by any Chinese company by 2015.

Statistics from the company's financial report showed that BYD's revenues decreased by no more than 1 percent from a year earlier, coming in at 46.31 billion yuan ($7.3 billion). Even so, its gross profit dived by 17 percent, falling to 6.87 billion yuan, and its profits attributed to equity holders declined sharply by 45 percent to 1.38 billion yuan.

The company's shares on the Shenzhen Stock Exchange gained 1.81 percent to close at 26.47 yuan on Monday, while its stock price dropped by 4.82 percent to hit HK$19.94 a share in Hong Kong.

The Shenzhen-based company, which the US billionaire Warren Buffett has invested in, blamed the profit decrease on its waning battery business, which has been harmed by a slowdown in demand for traditional mobile phones and on its shrinking share of the market for notebook computers. The company's rechargeable batteries and new-energy businesses were also harmed by the decline in demand in the European market for photovoltaic equipment.

BYD also said its automobile sales decreased by 13.33 percent in 2011 from the previous year, declining to 437,000 vehicles. For the year before, the company had set an ambitious target of selling 800,000 vehicles but eventually sold 520,000.

Despite the sales decline, BYD said in the financial report that its vehicle business had 22 billion yuan in revenue in 2011, a slight increase year-on-year.

Analysts also said the company lacks technologies and products that can compete with those of its domestic and foreign rivals. They said that situation will make it impossible for BYD to meet its goal of having the most sales of any Chinese automaker by 2015.

Wang Chuanfu, company chairman, said he is still optimistic about BYD's future in the biggest automobile market in the world. He said "the growth in sales in China's vehicle market is expected to reach 10 percent this year and BYD's will increase faster than that".

He said his confidence comes from the company's being a step ahead in the electric vehicle industry.

In March 2010, BYD formed a 600-million-yuan joint venture with the German automaker Daimler AG and began working to develop an electric vehicle specifically suited to the Chinese market. The companies plan to release the vehicle later this week, and the first of the new models is expected to be introduced at the Beijing auto show next month.
Analysts, though, said much must still happen before electric vehicles are widely used. BYD has only sold about 1,000 electric vehicles since it introduced them more than two years ago.

Subsidies for China’s Five Energy Companies and Two Power Grid Companies

2012-03-27T02:33:00.000-07:00

The State-owned Assets Supervision and Administration Commission of the State Council is drafting its funding plan for the 12th Five-Year Plan (2011-15) period and proposing to subsidize five energy companies and two power grid companies.

It will not be the first time that the electrical power industry has received such a financial subsidy. But the question is: can such cash injections really contribute to the development of China's power industry?

The losses from the thermal power generation business of the five State-owned electricity enterprises in the first seven months of 2011 were more than 18 billion yuan ($2.85 billion), a significant jump from the annual loss of 13.7 billion yuan in 2010.

But it is not the power generators' fault that they suffer such enormous losses. The growing deficit is a result of the rising cost of coal allied to the fact that the price of electricity for industry use has not increased proportionally and the price for residential use has remained stable because of government control.

If the authority can lift the control over electricity prices, the thermal power industry will naturally turn losses into gain.

However, the authority is understandably concerned that raising the price of electricity for industrial use may increase the cost of "Made-in-China" and intensify inflation pressures.

But keeping power prices artificially low by providing subsidies cannot be a long-term strategy to promote structural transformation.

There is no escaping the fact that export-oriented manufacturing industries are going to feel some pain, such as increased electricity prices, as the country transforms its economic structure and improves the quality of economic growth.

Yet higher power prices will help boost the industrial upgrading of manufacturing industries. Outdated machinery will be replaced by more energy-efficient and economical technology. And although the speed of economic growth may be affected for a while, it will be good for China's economy in the long run.

Ending the unproductive subsidies for the thermal power companies and lifting the overdue control of electricity prices are necessary if we are to transform China's economic structure for the benefit of all in the future.

China’s Power Consumption Up in First Two Months of Year

2012-03-16T02:38:00.000-07:00

China’s power consumption rose 6.7 percent year on year to 749.7 billion kilowatt-hours in the first two months of 2012, the National Energy Administration said yesterday.

Data from NEA showed the figure was lower than the 11.7 percent growth for last year, as the Lunar New Year, which fell in January this year, cut working days from the month.

In February, the country consumed 386.3 billion kwh in power, up 22.9 percent, the NEA noted.

In the first two months, residential electricity use gained 14.9 percent from a year earlier to 111.7 billion kwh.

The power consumption of the tertiary industries rose the most, up 10.3 percent over January and February, with total use hitting 94 billion kwh.

Meanwhile, primary industries saw power consumption fall by 4.7 percent year on year to 12.3 billion kwh, and that of secondary industries increase only 4.8 percent to 531.6 billion kwh.

New power generation increased by 3.85 million kilowatts in the January-February period, including 410,000KW in hydropower, 2.73 million KW in thermal power, 680,000KW in wind power.

Rare Earths Defended in China

2012-03-16T02:36:00.000-07:00

Rash as it is, the United States' latest decision to enlist World Trade Organization (WTO) support against China's rare earth policy is based upon unfair accusations.

The United States, European Union and Japan have teamed up to bring a joint case against China to the WTO over alleged export controls on rare earths, which they claim are hurting domestic manufacturers.

The accusations, which stress that China's rare earth policies have restricted global supplies, can hardly hold up to scrutiny, with demand only filling around half the export quotas last year.

It's well recognized that rare earths, a class of 17 mineral elements, are one of the most sought-after metals for their vital roles in green technologies such as wind turbines and electric car batteries, and of particular concern, in military sectors.

Following the precedents set by the United States, nonrenewable resources of great strategic importance should not have been subject to free-trade theories when "national security" is concerned.

However, for decades, China has been feeding most of the world's demand for the metals. Excessive exploitation, antiquated mining technologies and previously lax environmental standards have taxed the country's environment.

Reckless exploitation

In some small towns in east China's Jiangxi Province, where reserves of precious ion-absorbed-type rare earths abound, reckless exploitation of the metals since the late 1980s has not only destroyed landscapes, but also poisoned streams and crops.

Therefore, China has adopted reasonable rare earth policies - implementing domestic production caps, export quotas, stricter environmental standards and resource taxes.

Pressing China to abandon these policies is like building a greener and cleaner future by exploiting China's environment.

As a rule, the WTO allows its members to take necessary measures to protect resources and environment, and considers it fair if export restraints are accompanied by simultaneous restrictions over domestic production or consumption.

Damaging the environment

China's policies, in line with the WTO rules, should not draw criticism. The fact is, although China now produces more than 90 percent of the world's rare earth supplies, it does not have all the deposits. Most nations with rare earth deposits, including the United States, closed their own mines decades ago and craved cheap supplies from China.

Rare-earth mining and processing is notoriously devastating to the environment, making it politically difficult for those countries to reopen the mines, which means China is still expected to contribute tremendously to rare earth supplies.

However, those undeniable truths are overlooked since tunnel vision only gives a view of unfair trading practices. Few if any trade issues have been as heated in the last several years as rare earths. It's predictable that the United States would raise the matter at a time of fierce election-year pressures at home.

Energy-Efficient Lights Lack Standard on Harmful Radiation in China

2012-03-16T02:33:00.005-07:00

Local quality authorities said China lacks a standard on electromagnetic radiation released by energy-saving lights, which came after a warning from experts that the radiation could damage people's health.

Experts with the country's environmental-protection watchdogs said the radiation is harmful especially to people having sensitive constitutions.

"The opinion that electromagnetic radiation does no harm to human health is not scientific," said Zhao Yufeng, a radiation expert with the Ministry of Environmental Protection, during a seminar held in Shanghai this week. "People should be aware."

Zhao said the best way to prevent getting irradiated by energy-saving lights is to stay away from them. According to experts' tests, the radiation was 200 to 1,600 volts per meter at a distance of 10 centimeters from the lights; when the distance was 1.5 meters away, the radiation fell to about 10 volts per meter.

"People can choose energy-saving lights," said Zhao. "But such lights are not suitable for using as desk lamps or berth lamps."

Zhao said there is no need to establish a radiation standard for energy-saving lights, because there is a benchmark for indoor radiation, which has resulted in proper regulation of overall radiation.

Officials with the Shanghai Bureau of Quality and Technical Supervision noted that when they inspect energy-saving lights, radiation is not included as there is no law or standard.

China Becomes Top Foreign Investor in Germany

2012-03-16T02:32:00.001-07:00

China overtook the United States to become the top foreign investor in Germany in 2011 in terms of investment project numbers, according to statistics released by the Germany Trade & Invest (GTAI) agency on Thursday.

Chinese investment projects in Germany have totalled up to 158, ahead of the United States '110, Switzerland's 91 and France's 53, said a statement by GTAI, the economic development agency of the German government.

The foreign investment projects in Germany mainly concentrate in the mechanical engineering and automotive sectors, which account for 20 percent of the total, as most of them involved in the new production bases, in comparison with 13 percent being pumped into the sphere of new technologies, 6 percent into the field of renewable energy.

In a latest sign of the strong Chinese investment tide in Germany, automotive supplier Heibei Lingyun Industrial Group Corporation earlier this week agreed to buy Kiekert, a German maker of latch systems for cars.

Early this year, Chinese construction equipment manufacturer Sany Heavy Industry wound up a landmark acquisition of Putzmeister, a German engineering firm

The deal has been deemed as one of the biggest investment projects in the mechanical manufacturing and engineering sector, the pillar industry of the German economy.

More than half of the total foreign investments in Germany still come from the European countries, according to the GTAI.

Shandong Province in China Encourages New-Energy Powered Vehicles

2012-03-16T02:30:00.002-07:00

Shandong Province in China added 20,961 new energy-powered commercial vehicles last year, a year-on-year increase of 57.8 percent, according to the Shandong Provincial Transport Bureau.

This year, Shandong will continue to transform more oil equipment into gas equipment for the convenient operation of new energy-powered vehicles. Among various new energy-powered vehicles, the province will also give priority to promote buses and coaches.

Chaori Solar Modules Gross Profit May Exceed 70 million Euros

2012-03-16T02:14:00.000-07:00

Recently, Chaori Solar announced that the listed company issued 1 billion yuan coupon at interest rate of 8.98%, 5 years fixed rate bonds, of which 400 million yuan would be used to repay bank loans, 600 million yuan would be used to supplement working capital.

On January 11, 2012, Chaori Solar announced that a wholly owned subsidiary of Shanghai Chaori International Trading Company Limited ( the seller ) and China Solar Gmbh ( the buyer ) signed the "PV supply contract in 2012", agreeing that in year 2012 the listed company would supply the buyer with a total amount of about 110 million euros of the modules products, the contract was expected to bring about 19.58 million euros' gross profit. The people's livelihood Securities Research Report estimated that in 2012 Chaori Solar modules shipment would be 550-600MW, so in 2012 the listed company would obtained about 71.79-78.32 million euros gross profit.

Kaidi Electric Power Hubei Chibi Biomass Power Plant Set Project Started

2012-03-16T02:11:00.000-07:00

On March 10, Hubei Province Chibi Kaidi Green Energy Development Co., Ltd. 1 × 30MW set project officially started. The general contractor of the project is the Hunan Electric Power Design Institute, and the construction scale of the high-temperature ultra-high pressure is of 1 × 120t / h, CFB circulating fluidized bed boiler +1 × 30MW high temperature and high pressure extraction condensing steam turbine, which is SIEMENS company's products.

The project is designed of annual consumption of straw fuel about 23.0 × 104t, mainly from rice, rapeseed, wheat and other crop stalks of the surrounding counties in the 50km range.

Its construction would not only greatly reduce the environmental pollution generated by the original approach of the local agricultural waste, but also reduce the sulfur dioxide from coal-fired power plant pollution to the atmosphere, reducing the emission of fly ash, dust, and relieve Chibi supply load difficulties in promoting local economic development plays a positive role. With good social and environmental benefits, it will receive broad support from the government and society.

According to media reports, on January 7, 2011 Wuhan Kaidi Investment Co., Ltd. signed a cooperation agreement with the local government on the biomass power plant project, which was officially settled in Liu Shanhu Town of Chibi County, Xianning City, Hubei Province. The estimated total investment was of 2.5 billion yuan. The project started in March 2011.

Unpredictable Future of Herrel Company Performance

2012-03-16T01:27:00.005-07:00

The application of the Herrel Environmental Protection Industrial Co. Ltd. first public offering was 35.35 million shares, the total issued share capital was of 141.35 million shares, to raise funds for the Neijiang garbage incineration power generation project.

IPO draft declaration showed that for three consecutive years and the latest period from January to September 2011, the business income is respectively 22.6181 million yuan, 53.201 million yuan, 50.6585 million yuan and 35745900 yuan, the net profit is 19632700 yuan, 36741400 yuan, 38993600 yuan and 27.8303 million yuan, and the net profit rate is 87%, 69%, 77% and 78% respectively.

For such a high profitability, industry insiders said that Herrel business income is not high, but it can get high profit, which appears very abnormal.

China Explores Possibilities of Low-Carbon Future

2012-03-14T22:11:00.001-07:00

As China tunes down its growth expectations, the Asian economic powerhouse is trying to leave itself more room to improve the way in which it grows, and a low-carbon economy is certainly among its major goals.

With the country's lawmakers and political advisors gathering to discuss future plans and possibilities, China has presented its determination to further reduce emissions and give shape to a new low-carbon scheme.

"We will show the world with our actions that China will never seek economic growth at the expense of its ecological environment and public health," said Chinese Premier Wen Jiabao in a government work report delivered during China's annual legislative session.

Carbon emission trading would be one of the major steps, as in Wen's report, the Premier pledged to start trials of such a trade system and a cap-and-trade scheme for pollution rights, and move faster toward establishing "a compensation mechanism for ecological damage."

A pilot scheme for carbon emission rights trading already launched last year in seven Chinese municipalities and provinces -- Beijing, Shanghai, Tianjin, Chongqing, Hubei, Shenzhen and Guangdong -- with a view to expanding it nationwide if the tests proved successful.

"The trading is an important means to boost energy conservation and emission reduction," said Lu Xiulu, a local economic planning official in the southern Guangdong province and a deputy to the National People's Congress (NPC), the country's top legislature.

The official said carbon trading can help China realize its emission reduction targets, as well as encourage further green initiatives being incorporated into the country's economic development and the coordination of regional modernization. China has pledged to reduce carbon dioxide emissions per unit of GDP by 40 to 45 percent by 2020 compared to 2005 levels. But Lu noted that China's major challenge at the moment is the establishment of emission rights, and the establishment of a trading system.

Lawmakers and political advisors have also eyed the formation of a government-led platform for international climate trading. Zhang Jiao, a political advisor from the China National Democratic Construction Association, said China should develop futures and options products for greenhouse gas emission rights that could be tradable in international markets.

"China currently has several bourses for climate trading, but they lack a standardized trading mechanism," said Zhang.

Zhang Shouquan, a political advisor from Beijing, has proposed more fiscal and taxation support for emission reduction, further reform of energy pricing mechanisms, and establishment of funds to encourage the application of low-carbon technologies and projects.

China would also employ both traditional and high-tech measures, like tree planting and low-carbon buildings. In China, more than 92 million mu (6.13 million hectares) of land was planted with trees last year. These trees absorbed a total of 1.8 tons of carbon dioxide and produced more than 1.6 tons of oxygen in the period, said Chen Jiadong, a local forestry official from Fujian province and an NPC deputy.

Cao Hongming, a political advisor from the China Public Interest Party, is a strong supporter of low-carbon buildings.

Promoting the use of these buildings would ensure the healthy development of China's property market, as they can reduce pollution and save energy, land use, water and construction materials, Cao said.

But despite all these efforts, China, as the world's largest developing country, would stick to the principle of common but differentiated responsibilities' and play a constructive role in promoting the progress of international climate change negotiations, said Sheng Lianxi, a political advisor.

"China has a clear-cut attitude on environmental issues, that we would actively participate in the global biological diversity protection and air pollution control," said Sheng.

China's energy use per unit of GDP dropped 19.1 percent between 2006 and 2010, while energy-saving efforts helped reduce emission of carbon dioxide by 1.5 billion tons and saved the equivalent of 630 million tons of coal.

South Asian Countries to Identify Renewable Energy Problems

2012-03-14T21:59:00.001-07:00

Five South Asian countries are holding discussion over the renewable energy at a workshop that kicked off in Nepali capital Kathmandu on Tuesday.

The representatives of the South Asian Association for Regional Cooperation (SAARC) nations are holding a two-day workshop on renewable energy.

The workshop has been organized with the aim of exchanging mutual experiences and identification of problems about the renewable energy.

The workshop is expected to identify the problems related to renewable energy in the SAARC countries and their solution as well as share stories of success made in the sector so far, sources said.

Addressing the inaugural function, Minister for Environment Hemraj Tated said that renewable energy should be developed and promoted.

"Nepal is being gripped by the energy crisis and if renewable energy is developed through various technologies then the energy shortage could be managed," Minister Tated said.

He added that 45 percent of population in the nation is still deprived of electricity.

"Renewable energy should be conserved and utilized in a proper manner," he added.

The workshop has been organized by Alternative Energy Promotion Center and SAARC Energy Centre.

Speaking at the program, Executive Director of Alternative Energy Promotion Center, Govindaraj Pokhrel said one of the best ways of addressing the problem of crisis of energy is the promotion of the renewable energy.

The model of biogas plant adopted in Nepal has been followed by many countries, he added.

During the workshop, various working papers on different topics including solar system, biogas plant, micro hydro power projects and improved oven will be presented.

The participants of the program are scheduled to go for field inspection of the several projects related to the renewable energy.

Representatives from five countries of the SAARC- Nepal, India, Bhutan, Sri-Lanka and Pakistan- are taking part in the workshop.

China’s Private Business Expects Boon from New Policies

2012-03-14T20:33:00.000-07:00

Chinese beverage magnate Zong Qinghou sees his latest laureate as the richest person in the Chinese mainland as nothing to brag about.

Despite having 10.5 billion U.S. dollars in personal assets as calculated by the Hurun China Rich List 2011, Zong said his soft drink company, Wahaha, the source of his wealth, had a hard time operating in 2011.

Encroached by rising material costs, Wahaha reported no increase in profit gains from a year before despite a significant jump to 68 billion yuan (10.7 bln U.S. dollars) in sales revenue, a fall-back from its profit margin level in 2009.

"The only good news is that the fame now places Wahaha in better positions to compete and spares me from constant overseas trips to secure suppliers and distributors," Zong said.

Wahaha is not the only operator finding conditions tough in China's private sector, and other company bosses may not feel as sanguine as Zong. Last year, many small and medium-enterprises (SMEs) experienced choppy financial situations due to rising production costs and waning external demand, a plight further exacerbated by their difficulties in fund raising.

That explains why the recent statement by the central government has cheered the hearts of many. In his report delivered at the opening of this year's parliamentary session, Premier Wen Jiabao said China would lessen tax burdens on small and micro-sized businesses and increase credit support to them.

Small financial organizations will be given impetus to provide more funds to small private businesses, while reforms are promised for state-owned banks that had traditionally favored large enterprises.

Chinais anticipating slower economic expansion this year, with its GDP growth rate set at 7.5 percent, and the development of the real economy has been highlighted as a must if steady growth is to be maintained.

Financial Woes

The package of measures promised in the report is targeted at one prominent complaint by China's small and micro-enterprises -- the lack of funds.

Industry observers said, despite much heat in China's private investment in recent years, large amounts of money have flowed to speculation activities that stirred up the real estate market and fanned up prices of consumer goods, while leaving many of the country's manufacturers strapped for cash.

"Capitals are profit-driven in nature. The exodus of private investments from the real economy was mainly due to China's worsened climate for business," said Cheng Huifang, professor at Zhejiang University of Technology.

China's small and micro-sized enterprises, many of which are export-oriented, have been plagued by tenuous profit margins resulting from yuan appreciation, rising labor and material costs and fiercer competition for the dwindling orders from the Western world.

Moreover, entrepreneurs have found it harder to secure funds in needy times as China tightened credit conditions to curb inflation. A recent report by the All-China Federation of Industry and Commerce said 90 percent of China's SMEs failed to get loans from banks.

"I always ran into the question 'do you have factories for collateral or large enterprises to avouch for you?'" said Zhang Junjun, who runs a small company exporting commodities from east Zhejiang province and recorded 8 million yuan in export values last year.

Zhang said the unavailability of bank loans had forced him to scrape together the sum through individual lendings, and the constant liquidity crunch had forced him to turn down orders worth 5 million yuan.

Like Zhang, many small and micro-enterprises, lacking the collateral needed to secure bank loans, were forced to the private lending market, which remains unregulated and notorious for its sky-high interest rates.

In a high-profile unfolding of the crisis, more than 90 private company bosses in Wenzhou, an eastern economic hub, have reportedly disappeared, committed suicide or declared bankruptcy after failing to repay what they had pooled from the city's informal lending market.

Policy Support

However, many believe the chilly winter in Wenzhou is coming to an end, and a warm spring may soon fall on the country's private sector after the package of stimulating policies comes into effect.

Huang Mengfu, vice chairman of the National Committee of the Chinese People's Political Consultative Conference, has called for establishing more small and medium-sized financial institutions to provide services for private companies.

China will also direct private capital into the development of real economy by easing restrictions on market access in traditionally monopolized areas including railways, public utilities, energy and telecommunications, according to recent official statements.

The business sector has attached great hope to the government's promise of help, but some have expressed concern about the policies' implementation.

"The government report has put forward detailed boosting measures, which is very inspiring, but what we expect to learn more about is whether they could be fully enforced," said Qiu Jibao, board chairman of Feiyue Group, a sewing machine producer based in Zhejiang.

Qiu said the government had rolled out similar policies before, which did not achieve the expected effects due to poor enforcement.

Some analysts said, apart from strengthening government supports in finance and taxation, China should also accelerate upgrading its industries to truly improve the competitiveness of SMEs and their survival chances in hard times.

"The problem is that many Chinese enterprises still competed in the low-price and low-quality level, and their competition has been blind and filled with foul plays," said Yang Tianfu, board chairman of Xinxing Cathay International Group.

China's Energy Base Seeks Transformation on Diesel

2012-03-14T20:30:00.002-07:00

Coal-rich Inner Mongolia autonomous region in north China is seeking to process some of its huge amount of raw coal into diesel or electricity to add value to the resources and assist with the pressing task of environmental protection.

"The resources will dry up one day no matter how many we have now. We must find ways to free ourselves from the reliance on resources for our sustainable development," said Hu Chunhua, Communist Party chief of Inner Mongolia.

Inner Mongolia, with its estimated 700 billion tonnes of coal reserves, is China's burgeoning coal base, churning out more than one quarter of the country's coal output.

In 2011, over 60 percent of its 1 billion tonnes of coal production were channeled through land transportation to energy-thirsty areas like northeastern and central China as well as Beijing and Tianjin.

The heavy task of shipping coal out of Inner Mongolia has posed a challenge to land transportation. In September 2010, the Beijing-Tibet highway experienced traffic jams of up to 100 km in length as the road was clogged by huge numbers of coal-hauling vehicles.

"It is inefficient to transport coal to all over the country with diesel-driven trucks. So we must convert the coal to high-efficiency energy forms before sending it out," said Liang Tiecheng, director of the Inner Mongolia Development and Reform Commission.

China's central government has decided to build Inner Mongolia into an "energy base" and a "new-type chemical industry base" so as to give full play to its advantages in coal and non-ferrous metals and realize the transformation of its low-efficiency resources to more efficient forms like diesel or electricity locally.

Wang Rungang, a National People's Congress (NPC) deputy from the Inner Mongolia-based Shenhua Wuhai Coal Group Corp., said his company carried out a coal-chemical experiment program, enabling it to master the technologies involved in turning coal to diesel with an annual capacity of 1.2 million tonnes.

The value of diesel processed from coal is eight to 12 times that of the original material, Wang said.

Liang, also a deputy to the NPC, said the new technologies are different from those used in upgrading primitive coal processing. Instead, it is an integration of multiple coal-chemical technologies so as to achieve multilevel use of coal.

Moreover, Inner Mongolia will forge a highly value-added economic and industrial chain that is composed of its advantageous sectors including coal, iron and steel, rare earth and polysilicon, according to Liang.

The multilayer development of coal will be a strategic measure to ensure the country's energy security in the era of post-petroleum, he said.

"The resources in Inner Mongolia belong to the whole country, and we have no reason to waste any of them," the official said.