The China Quarterly

Review of The Political Economy of the Chinese Coal Industry: Black Gold and Blood-Stained Coal

Editor’s note: The review first appeared on The China Quarterly, 212, pp. 1127-1129. Copyright ©Cambridge University Press 2012 (http://journals.cambridge.org/action/displayJournal?jid=cqy).

Tim Wright examines China’s coal industry to shed some light on broader issues in China’s political economy during the transition from socialism to capitalism. The big questions this volume touches on include: to what extent do different levels of government undermine the capacity of the central government to achieve its objectives? Is the state predatory or developmental? Is the state advancing at the expense of the private sector? Have workers been winners or losers in the reform era?

Although some readers may question the extent to which the experiences of one industry can generalized to the Chinese political economy as a whole, the coal industry is an excellent choice for a single case study for several reasons. First, coal powers China’s economy, accounting for about 70 per cent of China’s energy mix. Second, the coal industry is an important source of employment, providing jobs for millions of people. Third, China’s heavy coal use is a major source of widespread environmental degradation in China, which threatens to undermine the achievement of the country’s longer-term economic goals, and China’s carbon dioxide emissions, which are the largest in the world. Fourth, coal is a source of conflict between the central and local governments, the state and the private sector and different industries.

Wright’s analysis of issues ranging from rent seeking to mine safety paint a detailed picture of how China’s political economy operates. For example, chapter five illustrates the limits of state capacity by chronicling the difficulties the central government faced in its efforts to close township and village mines (TVMs) in a bid to reduce the social and environmental costs of rural mining. The central government’s objective of reducing the role of TVMs in the coal sector encountered widespread opposition from mine owners bent on maintaining their property rights, workers determined to hold onto their jobs, and local officials intent on maintaining the government revenue and opportunities for personal enrichment provided by the TVMs. Consequently, neither the first nor second rounds of mine closures (in 1999–2001 and after 2005) were entirely successful, although Wright argues that the central government’s achievements were greater the second time around.

The breadth of the material covered in this volume make it a one-stop shop for readers interested in learning more about the issues discussed in media stories about China’s coal industry. Case on point: the brownouts suffered by 17 provinces in January 2008. Chinese officials were quick to offer up the weather as a scapegoat, arguing that a blizzard prevented rail deliveries of coal to power plants.  However, the widespread power outages had their roots in the struggle between coal producers and power plants over the price of coal used in electricity generation, discussed by Wright in chapter two. Unable to pass the full cost of coal onto their customers, many power stations maintained dangerously low coal stocks, which they depleted before the arrival of the snow-delayed replenishments. Similarly, while China is often viewed as the poster child for mining disasters, with Chinese fatalities making headlines around the world, Wright explains how and why China’s coal safety record has dramatically improved over the past decade in chapters seven and eight.

This volume, which draws on Wright’s long experience as a chronicler of China’s coal industry, should be of value to readers interested not only in the evolution of China’s coal industry but also the development of the Chinese political economy. The Political Economy of the Chinese Coal Industry is exhaustively researched and extensively utilizes the English- and Chinese-language literatures on coal in China. Indeed, it is Chinese language materials that are the source of many of the short anecdotes that add texture to Wright’s writing. He introduces us to 40 bachelors in a village in Hebei Province who were too poor to get married until the establishment of a coal mine provided them with jobs (p. 106). Similarly, Wright tells us about a mine owner in Shanxi Province who tried to conceal the deaths of 36 workers by transporting their corpses to Inner Mongolia (p. 162). Wright also does his readers a service by discussing China’s coal industry not only in a Chinese historical context but also in an international context, with the United Kingdom often serving as the point of comparison. For example, in his discussion of the negative impact of coal mining and coal use on China’s environment, he cites research by Thomas Rawski that “although Chinese levels of air pollution are higher than those in developed countries today, they are far from exceptional when compared with the same countries during early industrialization” (p. 40). In sum, Wright’s study should be a “go to” book for readers interested in a nuanced analysis of the evolution of China’s coal industry and the insights it provides into China’s political economy.