China’s Top Economic Planner Strengthens Credit Supervision on Coal Contract Performance

The National Development and Reform Commission (NDRC), China’s top economic planner, will strengthen credit supervision on the performance of medium- and long-term contracts for coal suppliers, amid the government’s efforts to ensure energy supply and price stability, according to a statement released on Monday.

Entering September, China has experienced severe power shortages in some of parts of the country caused by soaring coal prices and policies aimed at reducing energy consumption.

On October 20, the State Council, China’s cabinet, called for an all-out effort to ensure coal production and transportation for residential heating, as well as cracking down on coal market speculation, a clear and firm signal to make livelihoods the national priority.

In accordance with the deployment of the central government, since October, the NDRC, together with local economic planners, has verified and monitored the performance of nine contracts for coal and electricity supply, of which the problems involved have been resolved. Moreover, 108 cases have been categorized for further screening and verification.

On October 19, a man in Yulin, Northwest China’s Shaanxi Province, was detained for spreading rumors that coal prices rose to 100 yuan, which precipitates a negative impact on coal supply and the price stability.

Moreover, the NDRC has initiated a review of the issuance of the coal price index, after some agencies manipulated and fabricated false price index, which is deeded having damaged the public interest.

According to the statement, NDRC will urge the enterprises to sign as many contracts of coal and electricity of medium- and long-term as possible, as well as strengthening the contract performance credit supervision, in order to stabilize the market and ensure the energy supply.

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