industry—only professional coal enterprises and
coal power integration enterprises should remain.
All the central government-administered coal
enterprises achieved their capacity-cutting targets
for 2016 and 2017. SDIC and Poly Group
have transferred their coal businesses to China
Coal Group. In addition, local governmentadministered state-owned coal enterprises are
actively cutting capacity and have achieved their
capacity-cutting targets for 2016 and 2017.
9.3 The Reform of State-Owned
Energy Enterprises
9.3.1 The Idea Behind the Reform
Based on a review of the speeches and policies
on the new round of state-owned enterprise
reform, the basic idea behind the reform can be
summed up in the following six points:
First, ensuring national energy security wlll
continue to be an important goal. China is a
major energy producer and consumer, with a
balanced structure of supply and demand. Total
demand is large and has been relatively stable
following the economic downturn, with low
growth expected in the years to come. There are
objective constraints, such as local resource
endowment and long-distance transport. Seasonal and partial shortages are, therefore, difficult
to avoid. Ensuring national energy security
remains an important goal of this round of reform
of state-owned energy enterprises. In the future,
China’s energy supply system will be continuously optimised on the basis of local conditions
to ensure that the foundation of national energy
security will not change.
Second, state-owned enterprises will become
bigger and stronger. General Secretary Xi has
continually emphasised that China will make
state-owned enterprises and state-owned capital
grow bigger and stronger. Scale is one of the
characteristics of state-owned energy enterprises
and will remain so in the future. According to data
from the National Bureau of Statistics, in 2015
state-owned enterprises in the coal, petroleum,
chemical and power sectors accounted for 47.2%
of state-owned industrial enterprise assets and
40.2% of their employees. The aggregate assets of
state-owned energy enterprises amounted to
18.03% of the total assets of all industrial enterprises. Central government-administered energy
enterprises include China National Petroleum
Corporation (CNPC), China Petroleum & Chemical Corporation (Sinopec), China National Offshore Oil Corporation (CNOOC), National
Energy Investment Group (renamed after the
Shenhua Group-China Guodian merger), China
Coal Group, SPIC (after the CPI-SNPTC merger),
China Huaneng Group (CHNG), China Huadian
Corporation (CHD) and China Datang Corporation (CDT), as well as many local
government-administered state-owned energy
enterprises that are a pillar of their local economy.
These enterprises have good industrial foundations and advantages of scale, technology and
market, reflecting the strategic pattern of
state-owned capital in the energy industry. In the
future, the issues of how to make central
government-administered energy enterprises
stronger and bigger will be the focus of their
reform and development. The smooth progress of
the pilots to improve central governmentadministered energy enterprises is an example
for the reform and improvement of local
government-administered state-owned energy
enterprises.
Third, the roadmap for improving state-owned
capital in state-owned energy enterprises will be
created. The Guiding Opinions on Restructuring
and
Reorganising
Central
GovernmentAdministered State-Owned Enterprises, which
was implemented in July 2016, stipulates that
these enterprises “will significantly improve their
support capabilities in the sectors that impact
national security, such as national defence,
energy, transport, food, information and ecology”, and that they will “enhance their dominance in the key industries that affect the national
interest, people’s livelihoods and the national
economy, such as major infrastructure, key
resources and public services”, and that they will
584
S. Yaodong and A. Gillespie
coal power integration enterprises should remain.
All the central government-administered coal
enterprises achieved their capacity-cutting targets
for 2016 and 2017. SDIC and Poly Group
have transferred their coal businesses to China
Coal Group. In addition, local governmentadministered state-owned coal enterprises are
actively cutting capacity and have achieved their
capacity-cutting targets for 2016 and 2017.
9.3 The Reform of State-Owned
Energy Enterprises
9.3.1 The Idea Behind the Reform
Based on a review of the speeches and policies
on the new round of state-owned enterprise
reform, the basic idea behind the reform can be
summed up in the following six points:
First, ensuring national energy security wlll
continue to be an important goal. China is a
major energy producer and consumer, with a
balanced structure of supply and demand. Total
demand is large and has been relatively stable
following the economic downturn, with low
growth expected in the years to come. There are
objective constraints, such as local resource
endowment and long-distance transport. Seasonal and partial shortages are, therefore, difficult
to avoid. Ensuring national energy security
remains an important goal of this round of reform
of state-owned energy enterprises. In the future,
China’s energy supply system will be continuously optimised on the basis of local conditions
to ensure that the foundation of national energy
security will not change.
Second, state-owned enterprises will become
bigger and stronger. General Secretary Xi has
continually emphasised that China will make
state-owned enterprises and state-owned capital
grow bigger and stronger. Scale is one of the
characteristics of state-owned energy enterprises
and will remain so in the future. According to data
from the National Bureau of Statistics, in 2015
state-owned enterprises in the coal, petroleum,
chemical and power sectors accounted for 47.2%
of state-owned industrial enterprise assets and
40.2% of their employees. The aggregate assets of
state-owned energy enterprises amounted to
18.03% of the total assets of all industrial enterprises. Central government-administered energy
enterprises include China National Petroleum
Corporation (CNPC), China Petroleum & Chemical Corporation (Sinopec), China National Offshore Oil Corporation (CNOOC), National
Energy Investment Group (renamed after the
Shenhua Group-China Guodian merger), China
Coal Group, SPIC (after the CPI-SNPTC merger),
China Huaneng Group (CHNG), China Huadian
Corporation (CHD) and China Datang Corporation (CDT), as well as many local
government-administered state-owned energy
enterprises that are a pillar of their local economy.
These enterprises have good industrial foundations and advantages of scale, technology and
market, reflecting the strategic pattern of
state-owned capital in the energy industry. In the
future, the issues of how to make central
government-administered energy enterprises
stronger and bigger will be the focus of their
reform and development. The smooth progress of
the pilots to improve central governmentadministered energy enterprises is an example
for the reform and improvement of local
government-administered state-owned energy
enterprises.
Third, the roadmap for improving state-owned
capital in state-owned energy enterprises will be
created. The Guiding Opinions on Restructuring
and
Reorganising
Central
GovernmentAdministered State-Owned Enterprises, which
was implemented in July 2016, stipulates that
these enterprises “will significantly improve their
support capabilities in the sectors that impact
national security, such as national defence,
energy, transport, food, information and ecology”, and that they will “enhance their dominance in the key industries that affect the national
interest, people’s livelihoods and the national
economy, such as major infrastructure, key
resources and public services”, and that they will
584
S. Yaodong and A. Gillespie