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China

What carbon neutrality means for the future of coal in China

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A man walks near a coal-fired power plant in Harbin, China, 27 November 2019 (Photo: Reuters/Jason Lee).

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

Read the rest of this article on East Asia Forum

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Trends and Future Prospects of Bilateral Direct Investment between China and Germany

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China and Germany experienced a decline in direct investment in 2023 due to global economic uncertainty and policy changes. Despite this, China remains an attractive destination for German FDI. Key industries like automotive and advanced manufacturing continue to draw investors, although FDI outflows from Germany to China decreased by 30% in the first three quarters of 2023. Despite this, the actual use of foreign capital from Germany to China increased by 21% in the same period according to MOFCOM. The Deutsche Bundesbank’s FDI data and MOFCOM’s actual use of foreign capital provide different perspectives on the investment trends between the two countries.


Direct investment between China and Germany declined in 2023, due to a range of factors from global economic uncertainty to policy changes. However, China remains an important destination for German foreign direct investment (FDI), and key industries in both countries continue to excite investors. We look at the latest direct investment data between Germany and China to analyze the latest trends and discuss key factors that could shape future business and commercial ties.

Direct investment between China and Germany has undergone profound changes over the past decade. An increasingly complex investment environment for companies in both countries has led to falling two-way FDI figures in the first three quarters of 2023, in stark contrast to positive trends seen in 2022.

At the same time, industries with high growth potential, such as automotive and advanced manufacturing, continue to attract German companies to China, and high levels of reinvested earnings suggest established firms are doubling down on their commitments in the Chinese market. In Germany, the potential for electric vehicle (EV) sales is buoying otherwise low investment among Chinese companies.

According to data from Deutsche Bundesbank, Germany’s central bank, total FDI outflows from Germany to China fell in the first three quarters of 2023, declining by 30 percent to a total of EUR 7.98 billion.

This is a marked reversal of trends from 2022, when FDI flows from Germany to China reached a record EUR 11.4 billion, up 14.7 percent year-on-year.

However, according to China’s Ministry of Commerce (MOFCOM), the actual use of foreign capital from Germany to China increased by 21 percent year-on-year in the first eight months of 2023. The Deutsche Bundesbank’s FDI data, which follows standards set by the IMF, the OECD, and the European Central Bank (ECB), includes a broader scope of transactions within its direct investment data, including, broadly, direct investment positions, direct investment income flows, and direct investment financial flows.

Meanwhile, the actual use of foreign capital recorded by MOFCOM includes contracted foreign capital that has been concluded, including the registered and working capital paid by foreign investors, as well as the transaction consideration paid for the transferred equity of domestic investors.

This article is republished from China Briefing. Read the rest of the original article.

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

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Manila blasts China’s ‘unprovoked aggression’ in latest South China Sea incident

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China’s coast guard on Saturday fired a water cannon at a Philippine supply boat in disputed waters in the South China Sea, causing “significant damages to the vessel” and injuring its crew, the Philippine coast guard said.

Manila was attempting to resupply troops stationed on a ship at the Second Thomas Shoal, known locally as Ayungin Shoal, when the Chinese coast guard and maritime militia “harassed, blocked, deployed water cannons, and executed dangerous maneuvers against the routine RoRe (rotation and resupply) mission,” said the Philippine National Task Force for the West Philippine Sea.

The West Philippine Sea is the part of the South China Sea that Manila claims as its jurisdiction.

The Chinese coast guard also set up “a floating barrier” to block access to shoal where Manila ran aground an old warship, BRP Sierra Madre, to serve as a military outpost.

The Philippine task force condemned China’s “unprovoked aggression, coercion, and dangerous maneuvers.”

Philippines’ RoRe missions have been regularly blocked by China’s coast guard, but this is the first time a barrier was set up near the shoal. 

The Philippine coast guard nevertheless claimed that the mission on Saturday was accomplished.

Potential consequences

The Second Thomas Shoal lies within the country’s exclusive economic zone where Manila holds sovereign rights. 

China, however, claims historic rights over most of the South China Sea, including the Spratly archipelago, which the shoal forms a part of.

A Chinese foreign ministry’s spokesperson on Saturday said the Philippine supply vessel “intruded” into the waters near the shoal, called Ren’ai Jiao in Chinese, “without permission from the Chinese government.”

“China coast guard took necessary measures at sea in accordance with law to safeguard China’s rights, firmly obstructed the Philippines’ vessels, and foiled the Philippines’ attempt,” the ministry said.

“If the Philippines insists on going its own way, China will continue to adopt resolute measures,” the spokesperson said, warning that Manila “should be prepared to bear all potential consequences.”

Chinese Maritime Militia vessels near the Second Thomas Shoal in the South China Sea, March 5, 2024. (Adrian Portugal/Reuters)

U.S. Ambassador to the Philippines MaryKay Carlson wrote on social media platform X that her country “stands with the Philippines” against China’s maneuvers.

Beijing’s “interference with the Philippines’ freedom of navigation violates international law and threatens a free and open Indo-Pacific,” she wrote.

Australian Ambassador to the Philippines Hae Kyong Yu also said that Canberra shares the Philippines’ “serious concerns about dangerous conduct by China’s vessels adjacent to Second Thomas Shoal.” 

“This is part of a pattern of deeply concerning behavior,” Yu wrote on X.

Edited by Jim Snyder.

Read the rest of this article here >>> Manila blasts China’s ‘unprovoked aggression’ in latest South China Sea incident

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Foreigners in China: 2024 Living and Working Guidelines

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China’s Ministry of Commerce released updated guidelines for foreign businesspersons living and working in China in 2024. The guidelines cover accommodations, visas, work permits, and emergency protocols. It also outlines responsibilities regarding social security premiums and individual income tax obligations. prompt registration for temporary accommodation is required upon arrival.


The updated 2024 guidelines for foreign businesspersons living and working in China, released by the country’s Ministry of Commerce, outline essential procedures and considerations covering accommodations, visas, work permits, and emergency protocols.

On January 25, 2024, China’s Ministry of Commerce (MOFCOM) released the latest version of the Guidelines for Foreign Businessmen to Live and Work in China (hereinafter referred to as the “guidelines”).

The document is divided into four main sections, labeled as:

Furthermore, the guidelines elucidate the regulatory framework governing foreign businessperson’s responsibilities concerning social security premiums and individual income tax obligations.

This article provides a comprehensive overview of the guidelines, delving into their significance and implications for foreign businesspersons in China.

Upon arrival in China, prompt registration for temporary accommodation is required.

If staying in a hotel, registration can be facilitated by the hotel staff upon presentation of a valid passport or international travel documents.

This article is republished from China Briefing. Read the rest of the original article.

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

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