China

Coal is abundant and cheap in China. With the world's third largest deposits, China leads the world, both in the production and the consumption of coal. In 1994, coal accounted for 75 percent of the country's total energy consumption. The country's heavy reliance on its most available fuel is increasing as China's economic growth places greater demands on domestic petroleum supplies and the potential for petroleum import dependence increases. China's proximity to major coal-importing nations makes China an ideal exporter. Although rising, the amount of Chinese coal exports has been small due to domestic coal consumption requirements and poor infrastructure for exports. Coal imports by Asian countries are expanding primarily to meet rapidly increasing demand in electric power generation.

There has been some attempt at reform in the industry. Mine ownership has been partially redistributed from the government to private parties. Currently, around half of China's coal production comes from state-controlled mines and regional or local authorities.

The other half is produced by collective or privately owned operations. Reforms also have extended to the removal of price controls in early 1994 {see Endnote 300}.

The industry is beginning, however, to attract foreign participation. For instance, cooperative agreement was announced between the government and an international consortium to construct a $900-million underground coal slurry pipeline running from Shanxi Province to coastal Shandong. It will be the largest and longest such installation in the world and will have annual capacity of 15 million tons upon completion. Later, the project is to be expanded into an extensive coal slurry pipeline network. The project is one of the first major infrastructure projects in modern China to have western financial and management control {see Endnote 301}. In addition, BHP Mineral & Oil Company of Australia and two Chinese firms plan joint development of coalbed methane in North China's Shanxi province {see Endnote 302}. Amoco and ARCO are also exploring coal mining interests {see Endnote 303}.