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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (3798)	11/29/2004 12:46:38 AM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

China to Control Power Plant Investments 11.28.2004, 11:31 PM China will step up controls on investment in power plants, despite electricity shortages, to help ease pressure on coal supplies, state media reported Monday. Many of the plants now under construction were launched without legal approvals, the China Daily newspaper cited Xu Dingming, director of the National Development and Reform Commission's energy bureau, as saying. The controls, details of which weren't given, are part of a broad effort to rein in spending in sectors authorities say are expanding too quickly, straining the country's transport capacity and scarce resources. Local governments eager to boost tax and land use revenues have allowed unauthorized construction of power plants with a total capacity of 120,000 megawatts, a figure that amounts to about 30 percent of the country's total generating capacity, Xu told a weekend conference. About half of all coal mined in China goes to electricity generation and the excessive construction is putting pressure on coal supplies, the report said. A surge in accidents at the country's notoriously dangerous coal mines suggests that mine operators may be disregarding official campaigns to improve mine safety in their rush to supply power plants and other booming industries. Many Chinese cities have faced brownouts in the past year as demand outstripped power supplies. But by 2006 those shortages are expected to ease, and the risk now is of a glut in capacity, the newspaper quoted Huang Feng, director of energy projects at the China International Engineering Consultant Corp. as saying. That in turn could spell trouble for banks already loaded with bad debt, he said. Regulators have raised key interest rates and ordered curbs on lending for construction by state banks, warning that soaring investment could trigger financial problems if such projects are commercial failures. Authorities have also cited worries over inflation in their effort to slow economic growth, forecast at about 9 percent for this year. Prices for many commodities have surged, and the price of coal has jumped 30 percent this year, compared with last year, the China Daily report said. The government is accelerating construction of hydroelectric and nuclear power plants to help ease reliance on heavily polluting coal. It also plans to spend 40 billion yuan (US$4.8 billion; euro3.95 billion) on searching for new coal reserves, the report said. China's energy sector will require total investments of 10 trillion yuan (US$1.2 trillion; euro988 billion) by 2020, not including imports of crude oil and coal, Xu, of the National Reform and Development Commission, was cited as saying. forbes.com