6.4.2 Improve the Regulatory System
The first challenge for China’s coal industry
reform is that the regulatory system is not sufficiently sophisticated. Building a coal circulation
regulation system in line with China’s national
characteristics is an important area for institutional innovation.
Coal circulation regulations should be aligned
with a regulatory system that combines centralisation and decentralisation, encourages centrallocal collaboration, and strengthens self-regulation. Multiple authorities, at different levels and
covering different types of participant—including
regulatory and other government authorities,
central and local government, administrations and
associations—should take part.
The regulatory regime should cover various
functions of the coal market, including coal
quality, commercial fields, logistics, capital, and
information flow. Multi-functional supervision is
limited rather than universal. This means that it
should regulate key processes such as quality
standards, environmental protection, contractual
performance, credit supervision, risk supervision,
and coal mine safety supervision.
Coal mine safety regulations need to be
aligned with the reform of the state-owned capital management system and should take advantage of IT and intelligent technology. Regulators
should consider redrawing the boundary of corporate governance to relieve shareholders and
investors of the burden of administrative
management.
6.4.3 Build a Modern Market
Information Network
Institutional reform of the coal industry is
impossible without the support of IT and communications technologies. The purpose of
building a coal market information network is
very clear: it is to create a coal market
macro-control platform to provide data for government regulation. Suggestions are outlined
below.
First, a data system that integrates production
data and capacity regulation information should
be built. It should pool production data from
different sectors and form a 3D real-time capacity
data network, providing technical support and
scientific references for capacity governance by
government. The transition from a data system in
which designated companies upload their data at
intervals, to one in which business and regional
data is transferred in real time, will enable the
data network to spot companies forging data or
information in a timely fashion. Moreover, the
common practice in developed economies of
penalising companies that forge information
should be followed. Social groups and individuals should be incentivised to engage in capacity
supervision, and safe whistle-blowing channels
should be provided to supplement governance.
Second, coal circulation should become
increasingly intelligent to ensure logistics and
processing are visible, important coal market
information is collected, and key performance
indicators of the regulatory system are measured.
Third, intelligent development should be
aligned with the introduction of integrated coal
logistics parks, and centralised real-time data
acquisition points should be set up at different
nodes in the coal circulation system.
Fourth, vertical and horizontal barriers in
administration should be eliminated, and the data
interfaces of the regulatory platform should
enable data to be gathered from different
administrations and local government authorities.
Fifth, coal industry associations and big data
companies should collaborate to create an intelligent coal market information network that uses
big data to make coal circulation regulation more
market-oriented.
6.4.4 Accelerate Coal Circulation
Reform
Reform of China’s coal circulation lasted more
than 30 years, achieving great outcomes. But
coal circulation reform was not carried out systematically, except in some areas, such as coal
pricing mechanism reform, coal market system
building and coal regulatory reform.
Under the new normal of slower economic
growth, the coal market has experienced fundamental change. Coal circulation reform was
faced with external and internal pressures. One of
the objectives of regulatory innovation is to
Special Report 4: China’s Energy System Revolution
487
The first challenge for China’s coal industry
reform is that the regulatory system is not sufficiently sophisticated. Building a coal circulation
regulation system in line with China’s national
characteristics is an important area for institutional innovation.
Coal circulation regulations should be aligned
with a regulatory system that combines centralisation and decentralisation, encourages centrallocal collaboration, and strengthens self-regulation. Multiple authorities, at different levels and
covering different types of participant—including
regulatory and other government authorities,
central and local government, administrations and
associations—should take part.
The regulatory regime should cover various
functions of the coal market, including coal
quality, commercial fields, logistics, capital, and
information flow. Multi-functional supervision is
limited rather than universal. This means that it
should regulate key processes such as quality
standards, environmental protection, contractual
performance, credit supervision, risk supervision,
and coal mine safety supervision.
Coal mine safety regulations need to be
aligned with the reform of the state-owned capital management system and should take advantage of IT and intelligent technology. Regulators
should consider redrawing the boundary of corporate governance to relieve shareholders and
investors of the burden of administrative
management.
6.4.3 Build a Modern Market
Information Network
Institutional reform of the coal industry is
impossible without the support of IT and communications technologies. The purpose of
building a coal market information network is
very clear: it is to create a coal market
macro-control platform to provide data for government regulation. Suggestions are outlined
below.
First, a data system that integrates production
data and capacity regulation information should
be built. It should pool production data from
different sectors and form a 3D real-time capacity
data network, providing technical support and
scientific references for capacity governance by
government. The transition from a data system in
which designated companies upload their data at
intervals, to one in which business and regional
data is transferred in real time, will enable the
data network to spot companies forging data or
information in a timely fashion. Moreover, the
common practice in developed economies of
penalising companies that forge information
should be followed. Social groups and individuals should be incentivised to engage in capacity
supervision, and safe whistle-blowing channels
should be provided to supplement governance.
Second, coal circulation should become
increasingly intelligent to ensure logistics and
processing are visible, important coal market
information is collected, and key performance
indicators of the regulatory system are measured.
Third, intelligent development should be
aligned with the introduction of integrated coal
logistics parks, and centralised real-time data
acquisition points should be set up at different
nodes in the coal circulation system.
Fourth, vertical and horizontal barriers in
administration should be eliminated, and the data
interfaces of the regulatory platform should
enable data to be gathered from different
administrations and local government authorities.
Fifth, coal industry associations and big data
companies should collaborate to create an intelligent coal market information network that uses
big data to make coal circulation regulation more
market-oriented.
6.4.4 Accelerate Coal Circulation
Reform
Reform of China’s coal circulation lasted more
than 30 years, achieving great outcomes. But
coal circulation reform was not carried out systematically, except in some areas, such as coal
pricing mechanism reform, coal market system
building and coal regulatory reform.
Under the new normal of slower economic
growth, the coal market has experienced fundamental change. Coal circulation reform was
faced with external and internal pressures. One of
the objectives of regulatory innovation is to
Special Report 4: China’s Energy System Revolution
487