Page 9 - THE SOUTH CHINA BUSINESS JOURNAL
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D epth
“Under the new 2020 Action Plan, natural gas will
continue to be a substitute for coal but will now
only replace 30 percent of residential heating
power source as opposed to being an 80 percent
”substitute (as was aimed at last year).
In June this year, the State Council announced that production and international cooperation to better
it will ban new steel, coke, and primary aluminum coordinate sources inside and outside the country.
capacity in the Beijing-Tianjin-Hebei and Yangtze
River Delta regions. Within this region, Hebei’s steel Replacing the coal-powered heating system in
production will be further limited to 200 million tons Northern China’s residential homes will continue to be
by 2020. a key priority for the government.
Cities such as Beijing and Guangdong Province have However, having learnt from its previous year’s
been especially active on this front, and it is expected catastrophic heating crisis, the government has taken
that other cities will follow suit as the 2020 deadline a much more pragmatic and measured approach in its
draws closer. coal-to-gas conversion, this time round.
Beijing, is widely considered as leading the charge on Under the new 2020 Action Plan, natural gas will
industrial pollution control with no imminent signs of continue to be a substitute for coal but will now only
slowing down. replace 30 percent of residential heating power source
as opposed to being an 80 percent substitute (as
Having already rejected registration applications from was aimed at last year). In addition, the emergency
19,500 firms and shut down or relocated another 2,465 response mechanism will be able to regulate demand
manufacturers – it is expected that by 2020 Beijing will where possible, forewarn any imbalance in supply and
shut down a further 1,000 manufacturing firms. demand, and construct a multilayered reserve system.
These accelerated closures and relocations signify Beijing’s Bracing for a new anti-pollution era
withdrawal from traditional manufacturing businesses in China
with the aim of reducing smog and providing more job
opportunities for neighboring regions. Five years on from when Premier Li Keqiang first
declared China’s war against pollution – the nation’s
Similarly, Guangdong has issued draft guidelines crackdown efforts have become increasingly complex.
calling for a ban on new industrial capacity for a range
of businesses in the Pearl River Delta Region. Industries In 2018, China’s environmental laws, policies, and
targeted include: coal-fired power generation, steel, plans have two defining features – they are more
petroleum, petrochemicals, glass, ceramics, and non- widespread and more strategic.
ferrous metal smelting.
As the war against pollution wages on, businesses
5. Recommitment to clean energy should ensure they are compliant with the newest laws
alternatives and policies and ensure that their business strategy
reconciles with the targets set within the 2020 Action
Clean energy alternatives have received renewed Plan and the 13th Five-Year-Plan.■
attention after a slew of new policies were announced
this August, which aim to improve natural gas supplies China Briefing is produced by Dezan Shira & Associates. The firm
and promote the use of ethanol as a renewable biofuel. assists foreign investors throughout Asia and maintains offices in
China, Hong Kong, Indonesia, Singapore, Russia, and Vietnam. Please
A new diversified natural gas supply system will contact info@dezshira.com or visit www.dezshira.com.
be built just before winter, which expands domestic
South China Business Journal 5
“Under the new 2020 Action Plan, natural gas will
continue to be a substitute for coal but will now
only replace 30 percent of residential heating
power source as opposed to being an 80 percent
”substitute (as was aimed at last year).
In June this year, the State Council announced that production and international cooperation to better
it will ban new steel, coke, and primary aluminum coordinate sources inside and outside the country.
capacity in the Beijing-Tianjin-Hebei and Yangtze
River Delta regions. Within this region, Hebei’s steel Replacing the coal-powered heating system in
production will be further limited to 200 million tons Northern China’s residential homes will continue to be
by 2020. a key priority for the government.
Cities such as Beijing and Guangdong Province have However, having learnt from its previous year’s
been especially active on this front, and it is expected catastrophic heating crisis, the government has taken
that other cities will follow suit as the 2020 deadline a much more pragmatic and measured approach in its
draws closer. coal-to-gas conversion, this time round.
Beijing, is widely considered as leading the charge on Under the new 2020 Action Plan, natural gas will
industrial pollution control with no imminent signs of continue to be a substitute for coal but will now only
slowing down. replace 30 percent of residential heating power source
as opposed to being an 80 percent substitute (as
Having already rejected registration applications from was aimed at last year). In addition, the emergency
19,500 firms and shut down or relocated another 2,465 response mechanism will be able to regulate demand
manufacturers – it is expected that by 2020 Beijing will where possible, forewarn any imbalance in supply and
shut down a further 1,000 manufacturing firms. demand, and construct a multilayered reserve system.
These accelerated closures and relocations signify Beijing’s Bracing for a new anti-pollution era
withdrawal from traditional manufacturing businesses in China
with the aim of reducing smog and providing more job
opportunities for neighboring regions. Five years on from when Premier Li Keqiang first
declared China’s war against pollution – the nation’s
Similarly, Guangdong has issued draft guidelines crackdown efforts have become increasingly complex.
calling for a ban on new industrial capacity for a range
of businesses in the Pearl River Delta Region. Industries In 2018, China’s environmental laws, policies, and
targeted include: coal-fired power generation, steel, plans have two defining features – they are more
petroleum, petrochemicals, glass, ceramics, and non- widespread and more strategic.
ferrous metal smelting.
As the war against pollution wages on, businesses
5. Recommitment to clean energy should ensure they are compliant with the newest laws
alternatives and policies and ensure that their business strategy
reconciles with the targets set within the 2020 Action
Clean energy alternatives have received renewed Plan and the 13th Five-Year-Plan.■
attention after a slew of new policies were announced
this August, which aim to improve natural gas supplies China Briefing is produced by Dezan Shira & Associates. The firm
and promote the use of ethanol as a renewable biofuel. assists foreign investors throughout Asia and maintains offices in
China, Hong Kong, Indonesia, Singapore, Russia, and Vietnam. Please
A new diversified natural gas supply system will contact info@dezshira.com or visit www.dezshira.com.
be built just before winter, which expands domestic
South China Business Journal 5
