Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: RealMuLan who wrote (47236)	3/11/2004 1:57:32 AM
From: EL KABONG!!!	Read Replies (2) of 74559

Hi Yiwu, As I understand it, the "lack of demand" refers not to the end customers' demand for electricity. Instead it refers to the inability of the northern provinces' power suppliers to use gas to generate electricity. I have read somewhere that virtually all of the power generation capabilities within the northern provinces are coal-based, and perhaps one or two hydro-electric projects in the most southern parts of the northern provinces. To convert existing facilities to use gas rather than coal is an expense that the Chinese government has not yet provided for. Building new facilities (say with FDI or even government money) is again, not yet funded. And either way, it's an expensive proposition to convert from coal to gas. Now I've never been to northern China, and don't really know of anyone who has been there. But, if one of the main export products of the region over the years has been coal, then it makes complete sense that coal would have been the fuel of choice for the Chinese over these many years since the first plants were constructed. KJC

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