Coal news and updates

Economic growth in Taiyuan, Shanxi province, has crashed to zero from 12 per cent in one year. Yan Xiaofeng's coal-equipment business has gone down with it.

 

Yan said last week he had recorded 1 million yuan (HK$1.24 million) in sales so far this year from supplying equipment and parts to coal mines, down from more than 10 million yuan a year in the boom times of 2009.

 

"The economy in Shanxi is very simple: it's all about coal," said Yan, who has been in business in the region for 15 years. "When the coal industry is in decline, every other business follows."

 

Taiyuan's hard landing shows how China's transition to slower growth from decades averaging 10 per cent expansion will be messy in some places, especially Shanxi, which is suffering from anti-pollution policies aimed at curtailing coal use.

 

The city's situation highlights the challenge for policymakers in coming up with jobs and industries to replace manufacturing in regions dependent on commodities.

 

"It's always very hard to find a way to truly transform a local economy," said Gao Shanwen, the chief economist at Essence Securities. "If the ills in places like Taiyuan could be quickly cured, then hopes should be high for the Chinese economy. Unfortunately, the facts on the ground are harsh, and that's an obvious reason why people are cautious about the economic outlook."

 

Taiyuan, with a population of 4.3 million, reported growth of 0.1 per cent in the first quarter from a year earlier, compared with an 11.9 per cent pace in the same period last year and 8.1 per cent for the full year. Its industrial production fell 9.3 per cent in the first quarter, and fixed-asset investment rose 25.5 per cent, a sign of efforts to revive expansion.

 

It is not the only commodity-dependent region having a hard landing. Heilongjiang province reported a slump on a "very rare fall" in output from a major oilfield, according to Heilongjiang Daily. The newspaper said growth was 4.1 per cent, while the National Bureau of Statistics later said 2.9 per cent.

 

Hebei, which borders Beijing and is the country's biggest steelmaking region, grew 4.2 per cent in the past quarter, compared with 8.2 per cent last year.

 

Shanxi accounted for about 25 per cent of the country's coal output in 2012. Its first-quarter growth of 5.5 per cent was the third-slowest among the mainland's 31 provinces.

 

 

Source: http://www.scmp.com/