Formation Mechanism And Regulation Measures Research On China Coal Overcapacity

China coal market has been showing a relaxed supply posture since2012, andthe domestic coal price has also been falling with the shocks of increased importedcoal quantity and inadequate domestic coal demand, for now China coal overcapacityhas become an established fact. This paper sets the energy security and the coalindustry healthy and stable development for the target, focuses on what is the coalovercapacity, how it is formed and how to regulate the coal capacity. By means ofscientific analysis of the coal overcapacity formation mechanism and differentregulatory scenarios simulation to coal production, this paper puts forward thecorrespongding coutermearsures and regulatory programs, and the main conclusionsreflect on the following aspects:Firstly, baesd on the status research, the articl uses capacity utilization index toreflect our coal capacity situation during1990-2011, estimates the dynamic thresholdof coal capacity utilization with the state space model and evaluates the historicaltrends of China coal overcapacity scientifically. The study found that: the coalcapacity has a rapid growth under the influence of coal fixed assets investment andthe trend of coal overcapacity will become more prominent due to the blind expansionand the concentrated release; China coal production capacity has been through thecyclical fluctuation of “insufficient-excess” and now coal industry is entering a newphase of overcapacity; the estimation turns out that the coal capacity utilization rate in2011was91.5%and the excess rate is4.95%, based on the coal capacity andproduction during2012-2013, the utilization rate in2013should be92.5%, whichexceeds the5%warning line of China coal overcapacity rate, so how to use the law ofmarket economy to eliminate the excess coal production could become the key issue.Secondly, the research of coal overcapacity formation mechanism is based on thecoal business investment, local government investment and coal supply and demand.This paper uses the game model to suggest that: when the supply is less than thedemand, the investment growth rate increases as with the ratio of supply and demandwhile the greater cost of the central government regulation leads the local governmentto increase the non-compliance investment. In addition, coal company’s investmentcan strengthen its game capability so that China coal industry has an overcapacitytrend; when the supply is more than the demand, the investment growth rate changescontrary to the ratio of supply and demand, which given the decline in coal price, tomake the investment willingness of coal company and local government unachievable unless the investment growth rate is greater than the threshold, otherwise a new roundof investment boom can be triggered because of capital lock-in effect and resourcedepletion property as well as short-term construction cann’t be stopped, even largestate-owned coal enterprises takes the opportunity to integrate mergers of small andmedium coal resources.Thirdly, this paper constructs a system dynamic model and divides differentsimulation scenarios to analysis the regulation countermeasures, the study found that:if the average annual reduction of100tons of low-quality coal imports could bereduced about40million tons of coal production capacity during2012-2020and30%of the average annual reduction in the import of low-quality coal is most effective; theway of coal resource tax changes into ad valorem, and the rate of5%-7%makes aless impact on China’s coal market while coal production, coal supply and demandratio and the fluctuation in the coal price are all close to0; comparing two scenariosof capacity elimination rate, a1%increase can reduce147million tons of coalproduction capacity and the3.17%annual rate of elimination of backward productioncapacity which in part out of the market and another part of the upgrading andmergers and acquisitions is more suitable for the development of China coal industry;the investment structure optimization is the strongest one to reduce coal productioncapacity and a1%reduce of share of local government investment in total investmentcan bring about a10%reduction in coal production. Based on this,the paper suggeststhat government needs to exit from the investment subject, builds investment systemof coal company and the market, and makes the market mechanism play the main rolein it.Finally, this paper proposes regulation countermeasures and measures andcontrol scheme from four scenarios of the reduced coal imports, the coal resource taxreform, the elimination of backward coal production capacity and the optimizedinvestment structure, aim at finding a focal point for coal overcapacity regulation.