Chapter 4: Energy Policy in China Since its Reform and Opening Up

China’s energy policies are a diversified mix of government mandates, industry stipulations, and company activities. This chapter contains a discussion of these policies and an analysis of their impact on China’s energy security situation which is evaluated in Chapter 3.

In the early days after the founding of People’s Republic of China (PRC), the first task of the energy industry was to restore the normal production of the existing coalmines, oil fields, and power plants. To do this, the Ministry of Fuel Industry was established in October 1949 to manage the Coal Mine Bureau, the Oil Bureau, and the Electrical Industry Bureau (Yu, 2010). Acting as China’s energy industry authority, the Ministry of Fuel Industry was to take the lead to develop the coal industry, power industry, and oil industry in order to meet domestic demand. It developed the energy production plan and interfered with the individual enterprises’ production and management matters such as production planning, technology, and even workers’ wages. The establishment of the Ministry of Fuel Industry fully reflected the role of the planned economy of that period (CASS, 1996).