18 March 2013

Reaction to the new five-year energy plan that China released in late January has been mixed. Private and foreign investors are happy with the plan because it opens new doors for investment. There should be more renewable and alternative energy projects. Some manufacturers of solar photovoltaic modules should start to see more cashflow in the near term. On the other hand, local governments are now under pressure to limit their energy consumption as a percentage of domestic output so that the economy can continue growing without the need for more energy acting as a brake on growth. The monopoly positions and power held by state-owned energy companies will come under challenge.

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