China to extend preferential policies for coal exporters by two yrs

BEIJING (AFX-ASIA) The government is to extend its preferential policies to coal exporters for another two years in a bid to alleviate the glut on the domestic market, the China Daily Business Weekly reported, citing state officials.The policies were launched in 1999 after international coal prices fell, making Chinese domestic coal prices between 1 usd and 10 usd higher than on international markets, the paper cited officials as saying.The combined effect of the policies, which included a reduction of port charges and exemption from railway construction fund charges on four major transport routes to ports, cut the cost of exporting coal by some 15-20 yuan on an average shipping cost per ton of around 200 yuan.As a result, coal exports in 2000 rose 50 pct to 58.8 mln tons, Guo Kemu, vice president of the China National Coal Import and Export Corp (CNCIEC) was quoted as saying.Strong export growth has continued in the first quarter of this year, helped by a 10-15 pct rise in the price of coal on the international market. Guo said first quarter coal exports by the CNCIEC, which account for two thirds of China's total coal exports, rose 55 pct to 11.1 mln tons, and expects full year exports to rise 21 pct to 47.4 mln tons.Government statistics showed coal production in China, the world's largest coal producer, fell from some 1.3 bln tons a year in 1997 to around 1 bln tons last year, the paper said. But last year, the country was still left with some 100 mln tons unsold, the paper said. An official from the State Economic and Trade Commission surnamed Ru was quoted as saying that the preferential policies were also aimed at offsetting "unreasonable charges" which transfer profits from coal enterprises to the transport sector.It cited industry analysts as estimating that the railway construction fund raises some 10 bln yuan a year in charges from the coal sector.

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