IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

Yes

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 19 Dec 2017 | Removal date: 31 Dec 2020
Still in force

State aid, nes

On the 19 December, 2017, a plan signed by 12 Chinese ministries was released as a response to a State Council opinion from 2016 urging relevant ministries to target overcapacity and inefficiency in the Chinese coal mining industry by the end of 2020.

The plan aims to do this through large-scale M&A, so there will be fewer, larger firms in the market, specifically firms with a capacity of 100 million tonnes or more.

To achieve this, the plan officially encourages M&A loans to facilitate deals 'that have such funding requirements'.

The plan also mentions the provision of credit support with a view to being absorbed by large firms, for firms that are small and inefficient, and do not 'have long-term prospects'.

Small and inefficient firms will also be punished by not being awarded export quotas or grants for improving their facilities, unless they seek to merge with a larger firm.

The plan will give huge advantages to domestic firms, with the goal being to create a small number of very large, state-sponsored domestic firms, which dominate the market and can be more easily controlled by the government to maximise efficiency and reduce overcapacity.

AFFECTED COUNTRIES

MAP
TABLE
EXPORT

AFFECTED SECTORS AND PRODUCTS

110 Coal & peat
331 Coke & semi-coke of coal, of lignite or of peat; retort carbon
332 Tar distilled from coal, lignite or peat; other mineral tars

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