on management and supervision at each level and
on clearly defining responsibilities, including
those of regulators, government and coal companies. In particular, the responsibilities of
company management were clarified.
Emissions of air pollutants from coal use are
strictly controlled. The Chinese government has
improved its air pollution prevention work in
recent years. Coal combustion is one of the main
sources of air pollutants, so coal-fired power
plants and steel companies are two important
areas of government supervision.
The government began to build a national
monitoring system of pollution sources in 2010
and has been improving it ever since. Once the
system was completed, the government passed
the Environmental Protection Law (which provides strict and comprehensive regulation) in
January 2015, and the Atmospheric Pollution
Prevention and Control Law in January 2016,
which codifies emissions regulation. Also, in
2012 and 2015, the government substantially
raised emission standards for the steel industry.
Hebei province, a major steel producer, imposed
limits and substantially raised emission standards
in 2014 by incentivising coal-fired power plants
to implement super-clean emission standards.
Finally, there has been a push to reduce coal
consumption. Air contamination in Beijing,
Tianjin and Hebei is a serious problem. Reducing
regional coal consumption is an important
method of governance. Beijing is implementing
the coal-to-gas programme. Beijing, Tianjin,
Langfang and Baoding plan to introduce
coal-free zones by October 2017. Shijiazhuang,
Tangshan, Handan and Anyang have adopted
temporary policies to limit steel production
capacity to 50% in the cold season.
Tax reform of the coal industry since 2010 is
centred on two measures. First, reform of the coal
resource tax, which aims to move from a fee
system to a tax system, as well as encouraging
more efficient use of resources. Second, changing
business tax into value-added tax. Unlike the
reform of the coal resource tax, the business tax
to VAT reform is a national reform, not just a
coal industry reform. It involves paying VAT
instead of business tax on taxable items. The
business tax to VAT programme, launched in
May 2016, has been fully implemented in the
coal industry, just as it has in other sectors. The
tax reform programme, which aims to relieve the
tax burden on small and medium-sized companies and eliminate double taxation on large and
medium-sized companies, is another example of
tax reform in China following the tax sharing
reform of 1994.
The reform of state-owned coal companies
has been accelerated. The extensive losses of
China’s coal industry were caused by oversupply, the heavy debt burden of state-owned coal
companies and the weak profitability of most
non-coal businesses. The Chinese government
therefore regards speeding up the reform of
state-owned coal companies as an important way
to help the industry become profitable. In addition, accelerating the reform of state-owned
enterprises is an important aspect of the coal
industry’s supply-side structural reform.
The first stage was to restructure state-owned
capital investment corporations through pilot
programmes. Central and local state-owned coal
companies have become pilot reform targets for
state-owned capital investment corporations. The
plan is now being developed and implemented.
The state-owned capital management system and
mechanism are being transformed, as is the
organisational structure.
The second stage was to integrate, merge and
restructure resources. Some major coal suppliers
in Shanxi, Shaanxi, Heilongjiang and Hebei
formed large local state-owned coal enterprises
before 2010 by integrating state-owned coal
resources. Henan further integrated its coal
resources after 2010. To improve the safety and
efficiency of coal mines, state-owned coal companies were encouraged to integrate private coal
resources. The coal companies owned by central
government began to integrate resources during
the 13th Five-Year Plan (2016–20). The
State-Owned Assets Supervision and Administration Commission under the State Council
introduced new policies in 2016. These require
companies owned by central government that are
marginally involved in the coal industry to exit
the industry and transfer their resources to coal
478
S. Yaodong and A. Gillespie
on clearly defining responsibilities, including
those of regulators, government and coal companies. In particular, the responsibilities of
company management were clarified.
Emissions of air pollutants from coal use are
strictly controlled. The Chinese government has
improved its air pollution prevention work in
recent years. Coal combustion is one of the main
sources of air pollutants, so coal-fired power
plants and steel companies are two important
areas of government supervision.
The government began to build a national
monitoring system of pollution sources in 2010
and has been improving it ever since. Once the
system was completed, the government passed
the Environmental Protection Law (which provides strict and comprehensive regulation) in
January 2015, and the Atmospheric Pollution
Prevention and Control Law in January 2016,
which codifies emissions regulation. Also, in
2012 and 2015, the government substantially
raised emission standards for the steel industry.
Hebei province, a major steel producer, imposed
limits and substantially raised emission standards
in 2014 by incentivising coal-fired power plants
to implement super-clean emission standards.
Finally, there has been a push to reduce coal
consumption. Air contamination in Beijing,
Tianjin and Hebei is a serious problem. Reducing
regional coal consumption is an important
method of governance. Beijing is implementing
the coal-to-gas programme. Beijing, Tianjin,
Langfang and Baoding plan to introduce
coal-free zones by October 2017. Shijiazhuang,
Tangshan, Handan and Anyang have adopted
temporary policies to limit steel production
capacity to 50% in the cold season.
Tax reform of the coal industry since 2010 is
centred on two measures. First, reform of the coal
resource tax, which aims to move from a fee
system to a tax system, as well as encouraging
more efficient use of resources. Second, changing
business tax into value-added tax. Unlike the
reform of the coal resource tax, the business tax
to VAT reform is a national reform, not just a
coal industry reform. It involves paying VAT
instead of business tax on taxable items. The
business tax to VAT programme, launched in
May 2016, has been fully implemented in the
coal industry, just as it has in other sectors. The
tax reform programme, which aims to relieve the
tax burden on small and medium-sized companies and eliminate double taxation on large and
medium-sized companies, is another example of
tax reform in China following the tax sharing
reform of 1994.
The reform of state-owned coal companies
has been accelerated. The extensive losses of
China’s coal industry were caused by oversupply, the heavy debt burden of state-owned coal
companies and the weak profitability of most
non-coal businesses. The Chinese government
therefore regards speeding up the reform of
state-owned coal companies as an important way
to help the industry become profitable. In addition, accelerating the reform of state-owned
enterprises is an important aspect of the coal
industry’s supply-side structural reform.
The first stage was to restructure state-owned
capital investment corporations through pilot
programmes. Central and local state-owned coal
companies have become pilot reform targets for
state-owned capital investment corporations. The
plan is now being developed and implemented.
The state-owned capital management system and
mechanism are being transformed, as is the
organisational structure.
The second stage was to integrate, merge and
restructure resources. Some major coal suppliers
in Shanxi, Shaanxi, Heilongjiang and Hebei
formed large local state-owned coal enterprises
before 2010 by integrating state-owned coal
resources. Henan further integrated its coal
resources after 2010. To improve the safety and
efficiency of coal mines, state-owned coal companies were encouraged to integrate private coal
resources. The coal companies owned by central
government began to integrate resources during
the 13th Five-Year Plan (2016–20). The
State-Owned Assets Supervision and Administration Commission under the State Council
introduced new policies in 2016. These require
companies owned by central government that are
marginally involved in the coal industry to exit
the industry and transfer their resources to coal
478
S. Yaodong and A. Gillespie