Download China`s Energy Policy and Sino-Australian Energy Cooperation

China's Energy Policy and Sino-Australian Energy Cooperation
Ma Kai
Honorable Prime Minister John Howard, Ladies and gentlemen,
It's a great pleasure for me to attend the 2005 Annual Conference of Boao Forum for
Asia and explore with friends the question of strengthening of Sino-Australian energy
cooperation. Per the conference schedule, I will briefly introduce China's energy policy
and give some views on the strengthening of Sino-Australian energy cooperation.
Energy is an important foundation of national economy, an indispensable and
essential part of a normal modern society. It is an important task for the sustainable
development to ensure a long-term, stable, economical and safe supply of energy and
a strategic issue of universal concerns. In recent years, international oil prices have
generally climbed up amid large fluctuations. Countries attach great importance to the
energy issue and are interested to know what measures China takes to address the
demand for energy brought up by social and economic developments.
The Chinese government attaches great importance to the sustainable development
of energy. Last year, focusing on the construction of a well-to-do society in an
all-round way and the promotion of all-round, coordinated and sustainable social and
economic developments, we had made a mid- and long-term development plan for
energy. To sum up, the plan has the following characteristics:
I. Reliance on domestic supply. China is both a big energy consumer and a big energy
producer. China has rich coal reserves. In its energy structure, coal is predominant.
Coal accounts for 67% of China's energy consumption and 76% of energy production.
In 2004, China managed to supply 94% of its energy demand from domestic supply.
Therefore, we are well equipped to rely mainly on domestic supply to meet our energy
demand and take it as a fundamental solution to China's energy issue. We will
proceed from a diversity of fields, try hard to increase domestic energy supply
preconditioned on domestic energy supply and continue to maintain a high level of
self-reliance.
II. Priority given to energy conservation. We shall walk on two legs- energy
development and conservation- and give priority to the latter. We will summarize in
real earnest our experiences of supporting the quadrupling of GDP over the past 20
years based on a mere doubling of energy consumption, make great efforts in energy
conservation and further improve the efficiency of energy utilization. To that end, the
Chinese government has worked out a special energy conservation plan, resorting to
the promotion of optimization and upgrading of the industry mix, restriction of blind
expansion of high energy-consuming industries, acceleration of the transition of
economic growth mode and construction of a conservation-oriented society as
fundamental solutions to the energy issue, asking to rely on scientific and
technological advances, improve the efficiency of energy utilization and implement in
real earnest energy efficiency standards for key fields, key projects, key products and
key energy-consuming equipment, and setting a goal of striking an annual energy
conservation rate of 3% on average by 2020 and saving 1.4 billion tons of standard
coal on an accumulated basis.
III. Optimization of the energy structure. We shall insist on coal as the foundation while
diversifying energy sources to forge an energy structure with coal as the mainstay and
electricity as the core and the all-round development of oil, gas and new energies. We
shall make more efforts to build large coal bases, vigorously develop hydropower and
nuclear power projects, do a better job in exploration and development of domestic oil
and natural gas and continue to stabilize and increase domestic oil and gas output in
accordance with the principle of"tapping the potential in the east, developing the west,
speeding up offshore development and opening up the south", encourage the
development of renewable energy such as wind power and bio-energy, etc. and keep
increasing the share of clean energies.
IV. Environmental protection. China's energy development will accommodate both
economic and environmental requirements, minimize where it can negative
environmental impacts and strive to achieve the coordinated development of energy
and environment.
V. Strengthening of cooperation. In addressing the energy issue, while mainly relying
on domestic supply, China will expand its cooperation with world energy suppliers and
take use of an appropriate amount of overseas resources as necessary complements
to domestic sources. In terms of overseas cooperation, we insist on the strategy of
diversification, i.e. to diversify resource suppliers, modes of cooperation and varieties
of energy resources.
The aforesaid features show that China's sustained and rapid growth does not and will
not lead to worldwide energy shortage.
Ladies and gentlemen,
For many years, China has insisted in getting actively involved in international
exchanges and cooperation in the energy field on the basis of mutual benefits and
common development. Sino-Australian energy cooperation occupies an important
place in Sino-Australian economic cooperation and trade. We are delighted to see that
Sino-Australian energy cooperation has been progressing smoothly in recent years
and generated good results. The two sides have regarded each other as important
energy partners, strengthened trade and investment cooperation in the energy field
and established a bilateral dialogue mechanism on resource cooperation. Australian
enterprises have become the supplier of China's LNG project. Chinese oil and gas
companies have made initial progress in participating in Australia's natural gas
development at the upstream stage. Encouraging achievements are also seen in the
cooperation in exchanges on power technologies, personnel training and engineering
consultation, etc..
Australia has rich energy resources and advanced technologies. China has a rapidly
expanding energy market with great potential. There exists strong complementarity
between the two sides and enough space for cooperation in the energy field. In recent
years, Sino-Australian relationship of all-round cooperation keeps making new
progress. Australia recognizes China's status as a full-fledged market economy. The
two sides just decided to launch negotiations on FTA. The development of
Sino-Australian energy cooperation is faced with new opportunities. We would like to
act on the principles of"equality and mutual benefits, win-win, operation by
enterprises, coordination by governments, broad cooperation, diversified
development, honesty and enhanced communications" and promote and deepen
Sino-Australian energy cooperation in an all-round manner. Given the advantages and
demands for both sides, China and Australia should further strengthen their
cooperation in the following four fields:
I. Vigorously develop and deepen inter-governmental information exchanges and
policy dialogues. Both China and Australia are big energy producers and consumers.
The two could centre around subjects such as energy policy, energy security and
energy sector regulation to have regular exchanges and dialogues, communicate to
each other, enhance mutual trusts, expand their consensus and improve
institution-building so as to promote the deepening of Sino-Australian energy
cooperation.
II. Further cooperation on the LNG project. In general, supply exceeds demand on the
world LNG market. China is the largest LNG market in the world. Many countries have
approached China in the hope of export their LNG to China. We will base our
cooperation with countries on the strategy of diversification. There are already
successful examples of Sino-Australian LNG cooperation. We hope that Australia will
cherish such a good opportunity and continue to deepen its cooperation with China.
III. Promote mutual investment by enterprises in the energy field. Sino-Australian
relationship should be oriented towards the establishment and development of
long-term cooperation. New modes and fields of energy cooperation should be
actively explored. We must make efforts to create and constantly improve investment
climate, encourage and support investment by businesses in each other's natural gas,
coal and electricity sectors and achieve the complementarity of advantages.
IV. Strengthening of cooperation in renewable energies, new energies and the
improvement of energy efficiency. China has a broad market prospect in renewable
energy where Australia is in a favorable position. The two sides could conduct
effective cooperation. Nuclear energy, as a clean energy, is of importance to
environmental protection and the prevention of global warming. China and Australia
could further strengthen their consultations on the peaceful use of nuclear energy so
as to make substantial progress at an earlier date.
We are convinced that with the strong aspirations of the two countries' businesses to
strengthen exchanges and cooperation, the strong support and forceful promotion of
the two governments and the joint efforts of the two sides, Sino-Australian energy
cooperation will surely keep making new progress, reap richer fruits and render more
benefits to the two peoples.
Thank you, Prime Minister John Howard. Thank you, ladies and gentlemen!