1 For example William, Byrd, The Market Mechanism and Economic Reforms in China(Armonk: M. E. Sharpe, 1991);Google ScholarJoseph C.H., Chai and Leung Chi-Keung(eds.), China's Economic Reforms, Selected Seminar Papers on Contemporary China, VII (Hong Kong: Centre of Asian Studies, University of Hong Kong, 1987);Google ScholarFan, Qimiao and Peter, Nolan, China's Economic Reforms: The Costs and Benefits of Incrementalism (New York: St. Martin's,1994);Google ScholarHarry, Harding, China's Second Revolution: Reform After Mao (Washington, D.C.: Brookings Institute, 1987);Google ScholarJohn, McMillan and Barry, Naughton, How to reform a planned economy: lessons from China, Oxford Review of Economic Policy, Vol. 8, No. 1 (1992), pp. 130–143;Google ScholarBarry, Naughton, What is distinctive about China's economic transition? State enterprise reform and overall system transformation, Journal of Comparative Economics, No. 18 (1994), pp. 470–490Google Scholar

2 The government has ambitious plans for the development of nuclear power, but at present it accounts for less than 1% of total energy production. Gao Xinghua and Li Guoli, Zhongguo nuli huan jie dianli jin que zhuangkuang weilai 30 niannei xing jian yi pi hedian zhan (Relieving China's energy shortage conditions: over next 30 years build nuclear power plants) Renmin ribao (People's Daily) (RMRB), Overseas Edition, 17 December 1993, p.1.

3 Sun Shangqing, Nengyuan jiegou (Energy structure), in Ma Hong and Sun Shangqing (eds.), Zhongguo jingji jiegou wenti yanjiu (Problems in China's Economic Structure) (Beijing, 1980), p. 277; Yu Qiuli, Arrangements for the 1979 National Economic Plan, Beijing Review, No. 29 (20 July 1979), pp. 10–11; Wu Zhexin, Hubei meitan shichang yuan he zhouran jinzhang (Hubei coal market causes unexpected nervousness), Zhongguo meitan boo (China Coal Industry Newspaper) (MTB), 25 May 1995, p. 4; Han Jie, Meitan gongxu reng you yiding quekou, shui lai zuobi wenzhang (Coal shortages are certain, an essay),A/rfi, 11 May 1995, p. 4. It is beyond the scope ofthis article to evaluate the measures taken to improve consumption efficiency.

4 120 million await supply, South China Morning Post (SCMP), Business Section, 14 October 1994, p. 8.

5 Xinhua News Agency (Lexis-Nexis database) (Xinhua), 11 December 1988, item no. 1211082.

6 The China Coal Industry Yearbooks (CIYB) (Hong Kong: Economic Information and Agency 1982) provide considerable data for the CMAs, but very little apart from the production figures for the LS and LNS mines. They generally divide the data into two categories: guoyou zhongdian meikuang in the Chinese versions, translating this as state coal mines in the English versions, and difang meikuang, translating this as local coal mines. The latest edition available to the author (1994), to date published only in Chinese, is abbreviated to MTGYNJ, for Meitan gongye nianjian.

7 Elspeth Thomson, The development of China's coal industry, 1949–1978: towards an analytical model, Ph.D. Dissertation, School of Oriental and African Studies, University of London, 1993.

8 Zhongguo tongji nianjian (China Statistical Yearbook) (TJNJ) 1993 (Beijing: China Statistics Publishing House, 1993), p. 446; TJNJ 1994, p. 414;andXinhua, 12May 1995, item no. 0512113.

9 As of July 1989, the LNS mines had generated some 7.2 billion yuan, and peasants had earned another 4.6 billion yuan from transporting coal. Xinhua, 12 July 1989, item no. 0722129.

10 Some of the decline in production at the provincial mines can be explained by the upgrading of their classification to CMAs.

11 Raw coal generally has many impurities, such as shale, clay, pyrites, etc., which all reduce heating potential. There are several procedures available for washing coal. Ideally the coal should also be graded into various uniform sizes, improving it for specific purposes.

12 CIYB 1982, p. 26 and MTGYNJ 1994, p. 26. The amount in 1992 had actually been higher at 192.3 million tons Ibid. p. 26).

13 Zhang Zhijian, Wang Jiacheng and Xin Dingguo, Woguo de nengyuan zongshi he renwu (Our country's energy situation and tasks) Zhongguo nengyuan (Energy of China) (NY), No. 5 (1984), p. 3.

14 Chang Weimin, Coal firm spells out export goals, China Daily, 3 March 1992, p. 2.

15 Yu Ertie, Role and prospects of the coal-dressing industry under a market economy, Meitan kexuejishu (Coal Science and Technology), Vol. 22, No. 1 (January 1994), pp. 53–56, in Foreign Broadcast Information Service, Daily Report: China (FBIS-CHI), 3 May 1994, p. 33.

16 Richard, Edmonds, China's environment: problems and prospects, in Denis, Dwyer (ed.), China: The Next Decade (Essex: Longman Group, 1994), pp. 173–74, quoting Guojia huanjing baohuju (comp.), 1990 Zhongguo huanjing zhuangkuang gongbao (China Environment Conditions Workers' Newspaper) (Beijing: Guojia baohuju, 1991), p. 1; and W.Y.B. Chang, Human population, modernization and the changing face of China's Eastern Pacific lowlands, China Exchange News, Vol. 18, No. 4 (1990), p. 7Google Scholar

17 Wu Zongxin et al.,A macro-assessment of technology options for CO2 mitigation in China's energy system, Energy Policy, Vol. 22, No. 11 (November 1994), pp. 907–913.

18 Passing the buck - acid rain in Japan, The Economist, 21 August 1993, pp. 67–68; Vanessa Lide, The perils of pollution, China Business Review (July-August 1990), pp. 32–37. In 1992 the United Nations Development Programme launched a US$17 million programme for improving coal-use efficiency. An important component of this programme is control of atmospheric pollution. Xinhua, 26 January 1994, item no. 0126161.

19 Yu Ertie, Role and prospects, p. 33.

20 Thomson, The development of China's coal industry, p. 56.

21 Wang Zhuokun, Heli youxiao liyong meitan ziliao (Rational and effective use of coal resources), NY, No. 4 (1992), p. 28; Cui Jizhe and Yu Zhenhai, Meitan gongye zouxiang shichang de tiao cha baogao (Report on the progress of the coal industry market), MTB, 8 October 1994, p. 1.

22 Xu Yi, Chen Baosen and Liang Wuxia, Shehuizhuyi jiage wenti (Socialist Pricing Problems) (Beijing: China Financial Publishing House, 1982), p. 162; Heisanyong diqu shengtai riqu ehua (Daily deterioration of Heisanyong's ecology), RMRB, 13 October 1993, p. 3.

23 93% of the mining is underground. Opencast mining generally costs about half as much. For comparison, 80% of India's total coal and 46% of Australia's come from underground mines. P.D. Henderson, India: The Energy Sector (Delhi: Oxford University Press, 1975), p. 40 and National Coal Board, Coal in Australia, Prospects to 1990 (EIU, 1983), p. 38

24 CIYB 1982, p. 27; MTGYNJ 1994, p. 30. For the sake of comparison, in 1936, 55% of the coal in Britain's mines was cut mechanically, 97% in Germany's Ruhr Valley mines, 99% in Belgium's and 88% in France's Pas-de-Calais mines. Neil K. Buxton, The Economic Development of the British Coal Industry (London: B.T. Batsford, 1978), p. 17

25 Guy Doyle first raised this point in his China's Potential in International Coal Trade(London: International Energy Agency Coal Research, 1987), p. 30.

26 CIYB 1982, p. 36; MTGYNJ 1994, p. 31 and C1YB 1983, p. 136.

27 Synopsis of a speech made by Ye Qing at the National Coal Mining Mechanization Working Meeting held in April 1984, CIYB 1985, p. 44

28 Zhou Yitnin and Zhang Du, Jianchi gaige gaohao meitan gongye de wuzi gongying guanli (Persist in reforming supply management of materials to coal industry) Wuzi guanli (Materials Management), No. 4 (1986), p. 15. The Materials Supply Company functioned as a separate economic accounting unit responsible for its own profits and losses. Ye Qing, Explanations on the general contract for state-controlled mines, CIYB 1985, p. 146.

29 CIYB1982, p. 37; MTGYNJ 1994, p. 29. For comparison, 248.1 cubic metres of timber were required per ton in 1957 (CIYB 1982, p. 27).

30 MTGYNJ 1994, p. 29. Buxton, The Economic Development of the British Coal Industry, p. 258; A. Astakhov and A. Grubler, Resource Requirements and Economics of the Coal Mining Process: A Comparative Analysis of Mines in Selected Countries (Laxenburg, Austria: International Institute for Applied Systems Analysis, 1984), p. 90.

31 CIYB 1982, p. 27 and MTGYNJ 1994, p. 30

32 CIYB 1990, p. 24 and MTGYNJ 1994, p. 39; Jingjian shiwan ren jian kui jin shi yi woguo zhongdian meikuang shang bannian (Cut 100,000 workers and reduce losses at the main coal mines), RMRB, 3 October 1993, p. 2; Chang Weimin, Coal sector shedding 140,000 workers in 1993, China Daily, 16 August 1993, p. 2.

33 Regulations regarding contracting capital construction projects for the coal industry, CIYB 1982, p. 80; Capital construction of the coal industry, CIYB 1982, p. 109; Chronicle of events in coal industry since founding of the PRC (1949–1979), CIYB 1983, p. 74; The fixed wage per ton coal system will be exercised in state-controlled mines country-wide, China Coal Newspaper, 11 July 1984, quoted in CIYB 1985, pp. 65–66. Wages for extra output were twice the base wage (Shanxi Mining Bureau management personnel interviewed by author, September 1987).

34 Although it is illegal, women and children do work in state-run coal mines. Women tunnel on despite ban, SCMP, 28 August 1994. There are reports that children have been kidnapped to work in mines. For example, Official media reported this week more than 100 youngsters were rescued from small mining operations in central China's Hunan Province after they were kidnapped, forced to work and supplied little food or water. United Press International Agency (Lexis-Nexis database), China acts to end coal mine chaos, 30 December 1994.

35 Kuangshan shangwang shigu pin fa jin ru you lu wanshan Ufa zeng he zhi li shi zai bi xing (Frequent mine accidents - it is imperative to perfect mine legislation) Gongren ribao (Workers Daily), 20 February 1992, p. 3.

36 Geoffrey Crothall, Mainland coal mines trading in death quotas, SCMP, 25 August 1994; Quota deals a deadly trade, unsigned editorial in SCMP, 26 August 1994.

37 David Fridley, China's energy outlook, in China's Economic Dilemmas in the 1990s: The Problems of Reforms, Modernization, and Interdependence, Volume II, Joint Economic Committee Report, Congress of the United States (Washington, D.C.: United States Government Printing Office, 1991), p. 513, quoting Di Fangsi, Ministry of Energy, My views on accelerating the development of the local coal mining industry, NY, No. 1 (1989) p. 31.

38 David Shambaugh, China in 1990: the year of damage control, Asian Survey, Vol. 31, No. 1 (January 1991), p. 44.

39 Peter James, The Future of Coal (London: Macmillan, 1982), pp. 200, 222; Robert P. Greene and J. Michael Gallagher, Future Coal Prospects: Country and Regional Assessments,World Coal Study (Cambridge, MA: Ballinger, 1980).

40 Janos Kornai, who has written extensively on budget constraints, gives the following conditions for a perfect hard budget constraint: exogenous prices, hard tax system, no free state grants, no credit and no external financial investment. Janos Komai, Economics of Shortage, Vol. B. (Amsterdam: North-Holland, 1980), pp. 302–322.

41 Zhang Mengceng, Guoying meitan gongye chanpin jiage wenti (Problems with the prices of products from the state-owned coal industry) Caizheng (Finance), No. 3 (1958), p. 14.

42 Shanxi shehui kexue yuan, meitan jiage yanjiu keti zu (Shanxi Academy of Social Sciences, Coal Pricing Research Group), Meitan jiage gaige yu Shanxi meitan jiage (Coal Pricing Reform and Shanxi Coal Pricing) Research Report (August 1986), p. 53

43 Fei Weiwei and Yang Jiangyou, Meitan jiage mingnian qi quanbu fangkai (Next year all restrictions on coal prices to be lifted), RMRB, 23 December 1993, p. 2. Two billion yuan of low interest loans were announced in 1993. Ge di tuo qian Shanxi mei kuan 67.8 yi yuan (Shanxi coal industry owes 67.8 billion yuan), Jiefang ribao (Liberation Daily),11 February 1995, p. 5.

44 Fei Weiwei, Woguo zhongdian meikuang shang bannian jingjian shiwan ren jian kui jin shi yi (Cut 100,000 workers and reduce losses at the main coal mines), RMRB, 3 October 1993, p. 2; Chang Weimin, New prices to boost coal mining, China Daily (Business WeeklySupplement), 9–15 January 1994, p. 8.

45 Qin Jingwu, Nianzhong zhuangao - kuaisu fazhan de Zhongguo nengyuan gongye (Year-end special report - rapid development of China's energy industry), RMRB, Overseas Edition, 29 December 1993, p. 1; Xinhua, 10 January 1994, item no. 0110199.

46 Meitan jiage zai qi bolan (Coal prices surge up), Jingji cankao bao (Economic Information Daily) (JJCKB) 16 February 1995, p. 2.

47 Wang Senhao (Minister of the Coal Industry), Deepening reform and heading for market economy to speed up the development of the coal industry in a better way, ClYB 1993,p. i.

48 Arthur P. Sanda, The tiger sleeps no more, Coal (May 1995), p. 28.

49 Miqie lianxi qunzhong cujin meitan gongye fazhan (Promote close ties between the Party and the masses in the coal industry), RMRB, 15 April 1991, p. 1; Ge di tuo qian Shanxi mei kuan 67.8 yi yuan (Shanxi coal industry owes 67.8 billion yuan) Jiefang ribao, 11 February 1995, p. 5; Chris Yeung, Unrest spreads as miners wait for pay packets, SCMP,19 March 1994.

50 Coal consumer debt taxes industry, Zhongguo xinwen she (China News Service),1240 GMT 14 January 1994 in FBIS-CHI, 14 January 1994, p. 38; Willy Wo-Lap Lam, Fear of unrest as money runs out, SCMP, 17 May 1994.

51 Chang Weimin, Promised loans fail to reach coal mines, China Daily (Business Weekly Supplement), 1–7 August 1993, p. 8.

52 Energy industries top 1990 production targets, Xinhua English Radio 0751 GMT 6 January 1991, in FBIS-CHI, 7 January 1991, pp. 36–37; Han Ying, Guanyu 1993 nian jihua zhixing qingkuang yu 1994 nian jihua anpai (Conditions for carrying out the 1993 plan and arrangements for 1994 plan), NY, No. 3 (1994), p. 8.

53 Coal consumer debt taxes industry, Zhongguo xinwen she, 1240 GMT 14 January 1994, p. 38; Shanxi coal industry owes 67.8 billion yuan, p. 5.

54 Fei Weiwei, Dang he zhengfu guanxin meitan zhengye kunnan (The Party and government show concern about coal enterprises' difficulties), RMRB, 5 June 1994, p. 2.

55 Coal prices surge up, p. 2. This article states the three new policies re sales of coal: no cash payment, no coal, no commercial draft, no coal, still owe money from before, no coal; Niannei mei shi qu yu huilu - meitan xuqiu yinqie, mei jia you suo taisheng (Coal prices rise in coal market as demand rises), JJCKB, 4 April 1995, p. 2.

56 Coal miners at state mines are amongst the highest paid industrial workers.

57 Gao Yangwen, Quanli kaichuang meitan gongye xiandaihua jianshe de xin jumian (Great efforts must be made to create a new situation in modernizing the coal mining industry), NY, No. 2 (1983), pp. 1–7, 13.

58 Xinhua, 8 June 1994, item no. 0608151. The largest component of this was loans from Japan's Ex-Im Bank. Other major sources were the World Bank, Sweden and Italy. There has also been some direct investment.

59 Sandy, Hendry, Pit stop in China - U.S. firm pulls out of mining project, Far Eastern Economic Review, Vol. 151, No. 6 (7 February 1991), pp. 53–54; Coal industry set to expand opening, Beijing Review (31 July-6 August 1995), p. 26.Google Scholar

60 In 1993, exports amounted to 18.73 million tons, or 1.6% of total production (accounting for less than 1% of total export earnings), while 0.23 million tons were imported (MTGYNJ 1994, p. 178). By 2000, the government hopes to export 30 million tons; Coal industry to increase exports, Zhongguo xinwen she, 1257 GMT 22 June 1994, in FBIS-CHI, 21 June 1994, p. 26.

61 International Monetary Fund, International Financial Statistics Yearbook (Washington, D.C., June 1995), p. 72.Google Scholar

62 Mei Yan, Tiaozheng meitan jiage shi zai bi xing (Transforming coal prices is certainly right), Gongye jingji guanli congcan (Industrial Economics Management Collection), No. 11 (1983), pp. 55–56,45; Li Shiyi, Meitan jiage gaige de chubu shexiang (Preliminary ideas on coal price reform), Jidi yanjiu (Base Research), No. 22 (1986), p. 1.

63 For the sake of comparison in 1983, the price of a ton of coal was less than the price of 100 bars of soap, and until 1970 was less than the price of one kilogram of wool. Pricing chapter of TJNJ 1984 (Beijing: China Statistics Publishing House, 1985).

64 This is assuming that there was no change in 1966, 1967, 1968 and 1969. Data are not available for these years.

65 Dorothy, Solinger, The 1980 inflation and the politics of price control in the PRC, in David, Lampton (ed.), Policy Implementation in Post-Mao China (Berkeley: University of California Press, 1987); World Bank, China: Between Plan and Market (Washington, D.C.: International Bank for Reconstruction and World Bank, 1990);Google ScholarCalla, Weimer andMai, Lu, Prices: the two-tier transition process, in Walter Galenson (ed.), China's Economic Reform(South San Francisco: The 1990 Institute and the Federal Reserve Bank, 1993);Google ScholarWu, Jinglian and Zhao, Renwei, The dual pricing system in China's industry, inBruce E., Reynolds (ed.), Chinese Economic Reform - How Far, How Fast? (Boston: Academic Press, 1988). For debate about different approaches to the reform of coal prices, see Dong Jiben, Guanyu Shanxi nengyuan shengchan di jiazhi buchang wenti (Problems in energy production value compensation), Jingji wenti (Economic Problems), No. 1 (1985), pp. 9–12; Gao Yangwen, Chuangli you Zhongguo tese de chongman sheng ji he huoli de meitan gongye jingji tizhi (Creating a distinctly Chinese-style and vigorous coal industry economic system), NY, No. 2 (1985), p. 5; Lu Qikang, Guanyu meitan shengchan chengben yu chu chang jiage wenti de tantao (Investigation into coal production costs and producer prices), Jiage lilun yu shijian (Pricing Theory and Practice),No. 1 (1982),pp. 28–31; Ye Ruixiang, Guanyu meitan shiyou jiage wenti de yanjiu (Research into the problems with coal and oil pricing), Cai mao (Finance and Trade Economics), No. 10 (1983), pp. 39–42Google Scholar

66 TJNJ 1994 (Beijing: China Statistics Publishing House, 1994), p. 378.

67 The Far East and Australasia 1995 (London: Europa, 1995), p. 213.

68 Hu Fuguo (Vice-Minister), Reporting meeting for management work in state-run coal mines, 20 August 1984, ClYB 1985, p. 51.

69 Robert, Delfs, Power to the Party - centralized planning gains the upper hand, Far Eastern Economic Review, 1 December 1989, p. 23; Price ceiling for coal outside plans issued, Xinhua 1000 GMT 5 March 1990, in FBIS-CHI, 16 March 1990, p. 26; Huang Xiang, Measures to strictly control coal mart, China Daily, 10 April 1990, p. 2; Guowuyuan yao qiu jiaqiang dui jumin jiben shenghua xu pin he fuwu jiage jianshen (State Council to strengthen the monitoring of prices for basic living needs and services), Jingji ribao (Economic Daily), 13 March 1994, p. 1; Coal futures trading halted, SCMP, 17 September 1994.Google Scholar

70 Throughout the 1980s hundred of articles were written in the newspapers and academic journals on how best to reform energy prices. In 1987, the author interviewed two key contributors to the debate, Dong Jiben (then Deputy Director of the Research Institute of Energy Economics at the Shanxi Academy of Social Sciences) and Ye Ruixiang (then Deputy Head, Department of Costing and Pricing, Institute of Finance and Trade Economics, Chinese Academy of Social Sciences) (see n. 65). In 1992 the National Heavy Industrial Materials Pricing Bureau published two volumes which for the first time gave in precise detail estimated real values for all the different coals produced in every region of the country. Guojia wujia ju zhong gongchan pin fen ge si. Zui xin meitan chu chang jiage huibian (Collection of the Newest Run of Mine Coal Prices) (Beijing: China Materials Pricing Publishing House, 1992

71 Wang Senhao (Minister of the Ministry of Coal Industry), Deepening reform and heading for market economy to speed up the development of coal industry in a better way, CIYB 1993, p. i; Chang Weimin, Coal mines aim at 1.5 billion tons by 2000, China Daily (Business Weekly Supplement), 6–12 June 1993, p. 1; Chang Weimin, New prices to boost coal mining, China Daily (Business Weekly Supplement), 9–15 January 1994, p. 8.

72 Coal prices surge up, p. 2.

73 tion in coal has made coal shortage even more serious, Zhongguo tongxun she, 1147 GMT 1 September 1989, in FBIS-CHI, 14 September 1989, p. 31. This article states that there could be up to 20 different fees levied at the Shanghai port alone. Chinese army involved in illegal reselling of coal, Zhongguo tongxun she, 0634 GMT 4 April 1989, in FBIS-CHI, 7 April 1989, p. 34.

74 ai gang jiya shu gang, meitan jia reng zai shangzhang (Coal overstocks at Shanghai port, price still rises), Zhongguo wuzi bao (China Materials Newspaper), 25 March 1994, p. 1; Han Jie, Dongnan yanhai meitan gongqiu jiang huan zhong jian jin (South-east inshore coal supply getting tight), MTB, 6 July 1993, p. 4.

75 Black market coal burns the state, SCMP, 16 December 1994.

76 Tian, Hongbin and Yan, Tao, Nengyuan zhishi 500 ti (Energy Knowledge 500 Questions) (Lanzhou: Gansu People's Publishing House, 1985), p. 67.Google Scholar

77 Thomson, The development of China's coal industry, pp. 81–82.

78 Xinhua, 25 February 1986, item 022533; 29 February 1992, item no. 0229035.

79 Shanxi zhengdun chu sheng meitan jingying qiye (Shanxi reorganizes the management of coal enterprises that send coal out of the province), RMRB, 5 September 1988, p. 1.

80 Mei, zhen yao daoru hai ma? (Coal - is it really falling into the sea?), Zhongguo wuzi bao, 11 March 1994, p. 1.

81 This is discussed by Byrd, The Market Mechanism, pp. 44–45

82 Meitan yao shixing yi xiao ding chan de fangzhen (Must carry out the principle of producing coal according to consumption levels), Shanxi ribao (Shanxi Daily), 4 March 1986, p. 1; Han Ying, Guanyu 1993 nian jihua zhixing qingkuang yu 1994 nian jihua anpai (Conditions for carrying out the 1993 plan and arrangements for 1994 plan), NY, No. 3 (1994), p. 8.

83 Kenneth, Lieberthal and Michel, Oksenberg, Policy Making in China: Leaders, Structures, and Processes (Princeton: Princeton University Press, 1988), pp. 89–94,137–151.Google Scholar

84 Guojia tongji ju gongye jiaotong tongji si (China Statistics Bureau, Transportation Statistics Department), 1991 Guojia nengyuan tongji nianjian (1991 China Energy Statistics Yearbook) (Beijing: China Statistics Publishing House, 1992), p. 146

85 Must carry out the principle of producing coal according to consumption levels, p. 1.

86 Ministry drafts plan to boost coal industry, Xinhua, 1244 GMT 10 January 1994, in FBIS-CHI, 12 January 1994, p. 48.

87 Bid to end coal mining chaos, and Unlawful coal mines target of new decrees, SCMP, 31 December 1994.

88 Wang Yisheng, Shanxi kan li zhua mei dian shuili (Shanxi focuses on coal, power, water, railroads and highways), RMRB, 26 May 1993, p. 1; Group builds pipeline for coal, SCMP, 19 August 1994.