Summary

China ranks third in the world in terms of total coal reserves behind Russia and the United States, and coal is expected to dominate China’s power landscape for decades to come. However, Beijing has launched a national campaign to reduce coal capacity by around 500 million tons over the 2016-2020 period as part of its effort to boost coal prices and shut smaller, less efficient mines in favor of large and more productive ones. Much of China’s proven coal reserves are in the north of the country, making it difficult logistically to supply electricity to the country’s more heavily populated coastal areas. As a result, China’s Shanxi province, responsible for about 25 percent of the country’s total coal output, has announced it is cutting its production capacity by 23 million tons, and is aiming to shut down or consolidate mines with an annual production capacity of less than 600,000 tons

Impact

Finding new ways to keep the lights on. Despite its huge importance today, coal is in fact a sector in decline across China, whose northeastern provinces are in fact struggling with a decline in both coal and oil, and whose traditional steel mills are also struggling. The number of people employed as coal miners is falling, and the burning of coal for power has been in decline for years as well (China’s ‘golden decade’ for coal began in 2004 and ended in 2013). Efforts are under way in former coal-mining areas to create new economic opportunities in China’s rustbelt. But not even a return to strong economic growth in 2017 saw the Chinese government back down from its determination to move away from coal as an energy source.