Ma Kai, Director of China's National Development and Reform Commission

Director of the Office of the National Energy Leading Group

(December 16, 2006, Beijing)

Dear colleagues,

Ladies and gentlemen, friends:

Energy is an important material basis for the survival and development of human society. Every progress in the use of energy has promoted the development of economy and society. At the same time, energy also has a strong binding effect on economic and social development, and the carrying capacity of energy restricts the speed, structure and mode of economic and social development. In the 100 years of the last century, developed countries, which account for 15% of the world's population, consumed 60% of the world's energy and 50% of mineral resources in the process of industrialization and modernization. In the 100 years or more of the new century, developing countries, including China, India and Brazil, which account for 85 per cent of the world's population, will gradually realize industrialization and modernization. Judging from the historical process that mankind has gone through, industrialization is a historical stage in which social wealth accumulates rapidly and living standards improve rapidly, and it is also a historical stage in which energy and resources are consumed. How to solve the increasingly serious contradiction between population, resources, environment and accelerated industrialization and rapid economic growth is a major problem that needs to be answered in human development.

In recent years, the high volatility of international oil prices is a prominent reflection of this serious challenge. It should be pointed out that the international oil price once soared from 20-30 US dollars per barrel to 70-80 US dollars. The reasons are various, including economic factors and non-economic factors. From the perspective of economic factors, with the recovery and accelerated growth of the world economy, the demand for oil has increased. In addition, the low oil price in the previous period has led to a decrease in investment in refining and insufficient refining capacity, which has affected oil prices to a certain extent. But on the whole, the international oil market supply and demand is basically balanced, and supply slightly exceeds demand. In the past ten years, the average annual growth rate of oil production and consumption has been about 1.7 per cent, which is relatively stable. If there are no other factors, the price of oil will rise to a certain extent, but the rate of increase will never be so high. From the perspective of non-economic factors, the difficulties in the reconstruction of Iraq, the continued tension on the Iranian nuclear issue, the outbreak of conflict between Lebanon and Israel, and the natural disasters caused by the extreme climate have all played an important role in the rise of oil prices; thousands of fund companies around the world have made waves with a large number of speculative funds and engaged in oil speculation, which has become an important reason for the extraordinary rise in oil prices. The rise and turbulence of international oil prices have had a negative impact on the development of the world economy and caused economic problems in some countries, especially developing countries, and are not conducive to the production and consumption of world energy.

The Chinese government attaches great importance to the energy issue. Not long ago, President Hu Jintao proposed at the dialogue meeting between the leaders of the Group of Eight and developing countries in St. Petersburg that in order to ensure global energy stability, security and sustainable development, a new energy security concept of mutually beneficial cooperation, diversified development, and coordinated protection should be established and implemented. He stressed: it is necessary to strengthen mutually beneficial cooperation in energy development and utilization, especially to strengthen dialogue and cooperation between energy exporting and consuming countries and between major energy consuming countries, promote the development of oil and gas resources, realize the globalization and diversification of energy supply, ensure stable and sustainable international energy supply, ensure reasonable international energy prices, and ensure that the energy needs of all countries are met. The concept of new energy security is of great significance to the maintenance of global energy stability, security and sustainable development.

Dear colleagues:

In accordance with the requirements of the new energy security concept and the deployment of the "Eleventh Five-Year Plan" adopted by the Fourth Session of the Tenth National People's Congress, China will, as always, work with other countries in the world to maintain global energy stability, security and sustainable development. In the coming period, China's energy policy is:

First, priority is given to saving. China attaches great importance to energy conservation and has long adhered to the policy of simultaneous development and conservation, putting conservation in the first place. Through unremitting efforts, significant results have been achieved in energy saving and efficiency improvement. Energy consumption per unit of GDP in 2005 was 46% lower than in 1990. The "Outline" of the "Eleventh Five-Year Plan" proposes the goal of reducing energy consumption per unit of GDP by 20% by 2010 compared with 2005. We will give full play to the role of market mechanisms and economic levers, comprehensively promote energy conservation and efficient use, enhance the ability to conserve energy, and strive to build China into a resource-saving society through structural adjustment, technological progress, strengthening management, deepening reform, strengthening the rule of law and mobilizing the entire population.

Second, at home. For many years, China's energy self-sufficiency rate has remained above 90%. As a coal-dominated country, China's domestic energy supply has huge potential. Coal resources are rich, 3/4 hydropower resources have not yet been developed, the application of nuclear power, wind power, solar energy and biomass energy has just started, and alternative energy sources such as fuel ethanol, coal-based alcohol ether fuel and coal liquefaction have broad prospects for development. We will fully consider the characteristics of our own resources and our responsibility to maintain the stability of the international energy market, continue to rely mainly on domestic energy supply issues as the basic strategy for maintaining China's energy security, accelerate the development of the energy industry, and enhance domestic energy supply capacity.

Third, diversified development. Adhere to coal-based, diversified development, and strive to build an energy structure with coal as the main body, electricity as the center, and comprehensive development of oil and gas and new energy. Strengthen the construction of large-scale coal bases; actively develop hydropower and nuclear power; strengthen domestic oil and gas exploration and development to stabilize and increase domestic oil and gas production; encourage the development of renewable energy such as wind energy, solar energy, and biomass energy, and actively develop and utilize geothermal energy and ocean energy. By 2020, the proportion of renewable energy will increase from the current 7% to about 16%.

Fourth, protect the environment. The Chinese government attaches great importance to energy and environmental issues and regards environmental protection as an important part of its energy policy. Over the past 20 years, China has made significant progress in energy and environmental protection. Despite the substantial increase in thermal power installations, the total smoke and dust emissions from power plants have remained at the level of 1980. China's future energy development will take into account the dual requirements of economy and cleanliness, minimize the negative impact of energy development and utilization on the environment, and strive to achieve the coordinated development of energy and the environment. We encourage the development of advanced energy technologies such as coal washing, processing and conversion, advanced combustion, and flue gas purification. The new (expanded) construction of coal-fired power plants to synchronize the construction of desulfurization facilities, to speed up the existing coal-fired power plant desulfurization transformation. In the next five years, China's total emissions of major pollutants such as sulfur dioxide will drop by 10%.

Fifth, strengthen cooperation. The Chinese government has participated in a number of multilateral energy cooperation mechanisms. It is a full member of the International Energy Forum (IEF), World Energy Conference (WEC), Asia-Pacific Economic Cooperation (APEC), ASEAN 3, Asia-Pacific Partnership (APP) and other mechanisms. It is an observer of the Energy Charter and maintains close contact with international energy organizations such as the International Energy Agency. At the same time, China has established bilateral energy dialogue mechanisms with the United States, Japan, the United Kingdom, India, the European Union, and OPEC. In the future, we will continue to adhere to equality and mutual benefit, win-win cooperation, treat each other with sincerity, strengthen communication, proceed from the overall situation of maintaining global energy security, make full use of the complementarity of resources, economy and technology of all parties, and actively carry out international cooperation in the field of energy.

Dear colleagues:

China, India, Japan, South Korea and the United States have a combined population of 2.85 billion million and consume 45.2 per cent of the world's oil. In the field of energy, our five countries have both common interests and common problems. We have come together today to hold this meeting to send a rational and positive signal to the world, that is, the world's major energy consuming countries should strengthen mutually beneficial cooperation, jointly promote oil conservation, improve energy efficiency, vigorously develop alternative oil, reduce excessive dependence on oil, strengthen technical cooperation, research and joint development, and pay attention to energy and environmental protection. We should be honest, sincere cooperation, mutual benefit and win-win, common development, clear priorities, step by step, strengthen services, and provide convenience principles, and strive to seek the common interests of all parties in energy cooperation, according to the needs of the economic and social development of all parties, Focus on long-term and stable strategic cooperation, select key areas and key projects, strengthen the dialogue between government authorities, and deepen communication and exchanges between enterprises, we will build an open, transparent, competitive and effective energy market and create a new multi-level and wide-ranging international energy cooperation model. Here, I would like to put forward the following proposals on strengthening mutually beneficial energy cooperation among China, India, Japan, South Korea and the United States:

First, energy conservation cooperation. The five countries have broad prospects for cooperation in the field of energy conservation. The main aspects of cooperation are: First, exchange of experience in the formulation and implementation of energy conservation policies. Focus on cooperative research and mutual exchanges in enterprise energy audits, investment project energy conservation evaluation, energy efficiency labeling, and regional energy conservation performance appraisal systems. The second is to jointly promote the progress of energy-saving technology. Speeding up the technological upgrading of high-energy-consuming industries such as metallurgy, building materials, and chemicals, and reducing energy consumption per unit of product are the focus of China's energy conservation. I hope to strengthen cooperation with you. Some Chinese companies, such as Huaneng Power Group, are participating in the "Future Energy" research initiated by the United States to explore cleaner coal-fired power generation technologies, hoping to get support from relevant parties. The third is to promote the application of advanced energy-saving equipment and products. China is accelerating the promotion of ten major energy-saving projects such as building energy conservation and green lighting, and organizing and implementing the energy-saving work of 1000 high-energy-consuming enterprises. There is great space and potential for the research, development, promotion and application of new energy-saving materials, new equipment, and new products. I hope to strengthen cooperation with other countries, and sincerely welcome companies from all countries to come to China for investment and cooperation in these fields.

Second, alternative energy cooperation. With the main goal of reducing oil consumption, strengthen technical exchanges and cooperation, promote the industrial development of coal liquefaction, coal-based alcohol ether fuel, biomass fuel ethanol and diesel, and directly replace petroleum fuel consumption; cooperate in the development of coal-based olefin chemical industry to replace Petrochemical raw materials. At the same time, actively cooperate in the development of new energy, focusing on promoting megawatt-level wind power, agricultural and forestry biomass power generation, biogas power generation, biomass solid molding fuel and other new energy technology cooperation. Research and develop advanced technologies such as high-purity polysilicon, promote the application of solar photovoltaic power generation and thermal power generation technologies, and promote the industrialization of solar energy utilization.

Third, cooperation on oil reserves. The construction of China's petroleum reserve system has just started. The first phase of the reserve project under construction is mainly surface storage tanks. The next step is to study the construction of underground salt caves, water-sealed caves and other reserve facilities. We hope to cooperate with other countries in reserve engineering technology, operation and management, and exchange experiences, so that China can learn from the strengths of others and avoid detours in the process of establishing an oil reserve system.

Fourth, energy information exchange. It is hoped to make full use of multilateral dialogue and cooperation mechanisms such as the APEC Energy Working Group and the International Energy Forum to strengthen exchanges on energy development status, policy orientation, and strategic planning, implement the Joint Petroleum Data Initiative (JODI), and promote information exchange and sharing, so that countries can deepen Understanding, increasing trust and dispelling doubts, and providing the market with high-quality and timely energy data.

Fifth, forward-looking technology research. The main direction of future energy technology development is to develop economic, efficient and clean new energy. For example, hydrogen, as an energy carrier that can be obtained from multiple channels, will bring new changes to the clean utilization of energy; fuel cell power and distributed energy supply systems have clean and flexible characteristics, which will provide new energy utilization. Important forms; advanced nuclear fuel cycle and new energy technologies such as fusion energy and natural gas hydrate have attracted more and more attention. In these forward-looking energy technology fields, there is a wide range of cooperation space between governments and enterprises of various countries, and the development potential is huge. It should become the focus of energy technology research and cooperation among our five countries.

Sixth, increase energy supply. In order to promote the stable, safe and sustainable development of global energy, while actively promoting international exchanges and cooperation in energy-saving technologies, we should support relevant enterprises to jointly invest in the exploration and development of oil and gas resources in third countries, promote the improvement of the technological level of energy resources development in the world, and increase global energy supply capacity.

Dear colleagues:

Promoting global energy stability, security and sustainable development requires the participation of all parties. Government energy authorities should strengthen guidance and coordination, create a good environment, and provide important guarantees; enterprises should enhance their sense of responsibility and take effective measures to play their due role. It is hoped that through this meeting, the mutual understanding of the energy authorities of the five countries will be further deepened, and the enterprises of the five countries will be promoted to carry out extensive and in-depth international cooperation in improving energy efficiency, alternative energy and transportation energy, so as to achieve mutual benefit and win-win results. Let us join hands and work actively to maintain global energy stability, security and sustainable development.

Thank you all!