The China Analyst

Since the start of economic reform in China in 1978, China's annual coal output and consumption have experienced rapid growth rates. China is in fact now the world's largest producer and consumer of coal, with steadily increasing shares in both instances. While challenges such as high fragmentation and ongoing industry consolidation, technology upgrading, safety or environmental protection, among others, are important factors in the overall development of China's coal industry, domestic companies still benefit from rapid economic growth, strong domestic demand and the relevance of coal (71%) in China's total primary energy consumption. In this edition, Mapping China illustrates China's coal production and consumption figures as well as the major features and trends in China's coal industry during the last three decades. By The Beijing Axis KM & Research Unit

Key features and trends: In the early 1980s, China was the world's third-largest consumer and producer of coal and also a net coal exporter. In order to meet increasing demand for coal, a large number of small/township mines was developed in 1980. Over-decentralisation of production and supply-demand imbalances eventually led to a severe recession in the coal industry. From 2000 to the present, the coal industry has been re-organised. Coal production is being controlled and production distribution is being optimised. Larger coal production groups have been formed and small and medium coal mines are being consolidated.

Source: Understanding the Chinese Coal Industry; The Beijing Axis Analysis

Key features and trends: China is both the largest consumer and producer of coal in the world. Coal consumption has been on the rise in China over the last decade, reversing a decline seen from 1996 to 2000. Coal production, also rising, was estimated at almost 3.4 billion short tons in 2009. China's coal imports started growing after 2002 as imported coal prices became competitive with domestic production prices (the domestic coal industry suffered from frequent bottlenecks in distribution to consumer markets). In 2009, China, typically a net coal exporter, became a net coal importer from countries such as Indonesia and Australia, among others.

Source: Understanding the Chinese Coal Industry; The Beijing Axis Analysis