countries in this field, particularly marked by its flimsy basis for independent innovation, backwardness in core technology, and dependence on imports for some key technologies and equipment. Therefore, the Chinese government will attach more importance to technological innovation. It will establish and complete at full speed an energy technology innovation system that suits China's reality, and combines efforts of enterprises, colleges and research institutes. The National Energy Technology Program During the 12th Five-Year Plan Period, issued in 2011 as China's first scheme to improve its energy technology, has outlined the four key aspects of China's energy technology, namely, exploration and exploitation; processing and conversion; power generation, transmission and distribution; and new energy. The program also contains an overall plan to build a national energy technology innovation system that integrates research into key technology, manufacturing of key equipment, key demonstration projects and a technological innovation platform.
-- Reinforcing energy technology R&D. China will launch a series of strategic and advanced research projects on frontier technologies in basic sciences like geology, materials, environmental studies, power and energy, and information and control, with the aim of making breakthroughs in basic energy sciences. The Chinese government encourages major enterprises and research institutes in the industry to carry out studies in advanced and adaptive technologies, and put them into practical use, like high-efficiency and intensive coal mining technology, exploration and development technology of unconventional oil and gas resources, high-efficiency clean technology, offshore wind power technology, solar thermal power technology, advanced oil and gas storage and transportation technology, and high-capacity, high-efficiency and long-distance power transmission technology. China will press on with the two national high-tech programs -- \oil-gas fields and coal-bed gas development,\and \advanced pressurized-water reactor and high temperature gas-cooled reactor nuclear power stations\-- to facilitate key technological innovations, and enhance the innovation abilities, including \innovation,\\innovation\
-- Promoting progress of energy equipment technology. Based on major technological equipment projects, China strives to make technological breakthroughs, improve supporting facilities, set up and enforce technical standards for energy equipment, establish a complete testing and certification system, and raise its ability for energy equipment design, manufacturing and system integration. China will further enhance the supporting policy system, boost the technological advance of key equipment, such as high-capacity, high-parameter and ultra-supercritical generating units, gas turbines, third-generation nuclear power, renewable energy generating units, exploration and development of unconventional oil and gas resources, and spreading the application of state-of-the-art equipment. The government will also strengthen planning and
guidance for the energy equipment manufacturing industry to prevent redundant construction.
-- Launching major technological demonstration projects. Centering on the transformation of energy development mode and upgrading of the energy industry, the Chinese government will give more support in funding, technology and policy to launch major demonstration projects in such fields as large pressurized-water reactors, high-temperature gas-cooled reactors, development and utilization of coal-bed gas, exploration and development of shale gas, and deep processing of coal, energy storage and smart power grids, thus promoting the application of technological and scientific research achievements in production.
-- Improving the innovation system of energy technology. The Chinese government will continue to support large enterprises, R&D institutes, colleges and universities to set up national innovation platforms that can conduct independent R&D and make breakthroughs in core technologies, especially technologies for coal exploration, development and utilization of coal-bed gas, exploration and development of shale gas, marine engineering equipment, high-capacity high-efficiency and low-pollution power generating equipment, smart grids and advanced nuclear reactors. It will improve the policy system supporting technological innovation platforms. The government will give full play to the role of enterprises in innovation, and encourage them to spread and apply innovative technologies. It will guide R&D institutes and institutions of higher learning to serve enterprises in the field of innovation, and better integrate the efforts of enterprises with that of the research institutes and institutions of higher learning. The state will set up an evaluation and reward mechanism for technological development, and establish and improve a training system and an incentive mechanism for innovations.
VIII. Deepening Institutional Reform in the Energy Sector
Reform constitutes a strong dynamic force in accelerating the transformation of the development mode. China will resolutely implement reform in the energy sector, strengthen top design and overall planning, accelerate the pace of building a system and mechanism for the scientific development of the energy industry, ameliorate the environment for energy development, bring about a revolution in energy production and utilization, and safeguard China's energy security.
-- Accelerating building of legal regime for the energy sector. China will improve its energy-related legal regime to regulate the energy market, protect the ecological environment and guarantee energy security. China attaches great importance to energy legislation and will press on with the improvement of the legal system related to the energy sector. Now, work has been going on an energy law, as well as a series of administrative regulations on oil reserves, protection of submarine oil and natural
gas pipelines, and nuclear power station management. It has amended the Coal Industry Law, the Electric Power Law and other laws, and has been making efforts to promote the enactment of laws concerning oil, natural gas and nuclear energy.
-- Improving the market mechanism. China is actively promoting market-oriented reform in the energy sector by giving full play to the fundamental role of the market in the allocation of resources. All projects listed in the national energy program, unless forbidden by laws or regulations, are open to private capital. The Chinese government encourages private capital to participate in the exploration and development of energy resources, oil and natural gas pipeline network construction and the electric power industry, encourages the involvement of private capital in coal processing and oil refining, and supports the entry of private capital into the new energy and renewable energy fields. The Chinese government will intensify and regulate the administration of coal exploration and development rights, gradually eliminate the double-track price system for contracted coal supply and market coal supply, and create a mechanism to balance the development of coal and coal-bed gas. The government will press on with institutional reform in the power sector and steadily carry out trials to separate power transmission from power distribution. Proactive efforts will be made in the pricing mechanism of electricity to gradually let the market decide the prices of electricity generated and marketed, while the prices of transmission and distribution are to be decided by the government. The state will regulate the prices of coal for electricity generation and prices of electricity marketed, and explore ways to set up a renewable energy trading mechanism. It has successfully implemented the price, tax and fee reform of refined oil products and guides the public's rational energy consumption through tax means. It will continuously rationalize the refined oil price and form a pricing mechanism, and start the experimental reform of natural gas pricing mechanism. It will improve the market system for energy and develop more forms of trade, including spot trade, long-term contracts and futures trade.
-- Tightening administration of the energy sector. In order to increase the efficiency of energy development and utilization, promote the scientific development of the energy sector and safeguard the country's energy security, China is determined to strengthen administration in the energy sector. It takes strategic planning and macro-control for energy development, and carries out industry regulation by making use of plans, policies and standards. The Chinese government will reduce its intervention in specific matters and simplify administrative examination and approval, while intensify supervision over monopoly and unfair competition by establishing an open, fair, scientific and effective supervision mechanism. It will strengthen statistics collection and forecasts related to the energy sector, and establish a comprehensive system covering statistics, monitoring, forecasting and early warning in this regard.
IX. Strengthening International Cooperation in Energy
China's development cannot be achieved without cooperation with the rest of the world, and the prosperity of the world has need of China as well. With accelerating economic globalization, China has forged increasingly closer ties with the rest of the world in the field of energy. China's development of energy has not only satisfied its own needs for economic and social progress, but also made great contributions to world energy security and global market stability.
China is an active and responsible participant in international energy cooperation, and it has established bilateral dialogue and cooperative mechanisms in the field of energy with the US, the EU, Japan, Russia, Kazakhstan, Turkmenistan, Uzbekistan, Brazil, Argentina, Venezuela and many other countries and regions, and has strengthened dialogues, exchanges and cooperation with these countries regarding oil, natural gas, coal, electric power, renewable energy, technology, equipment and energy policy. China is also a member of or important participant in many multilateral organizations and mechanisms, including the energy working group of the Asia-Pacific Economic Cooperation Organization, Group of 20, Shanghai Cooperation Organization, World Energy Council and International Energy Forum. It is an observer of the Energy Charter, and maintains close relations with such international organizations as the World Energy Agency and the Organization of Petroleum-Exporting Countries. In international energy cooperation, China assumes a wide range of obligations and plays an active and constructive role.
China upholds a policy of opening to the rest of the world in the field of energy. To provide a favorable environment for foreign investment and protect the legitimate rights and interests of investors, it has promulgated a series of laws and regulations in succession, like the Law on Sino-foreign Equity Joint Ventures, Law on Sino-foreign Cooperative Joint Ventures and Law on Foreign Investment Enterprises, and framed such policy documents as the Catalogue of Industries for Guiding Foreign Investment and the Catalogue of Advantageous Industries for Foreign Investment in the Central and Western Regions. The Chinese government encourages foreign investment to engage in the exploration and development of oil, natural gas and unconventional oil and gas resources, such as shale gas and coal-bed gas, by way of cooperation; invites foreign investment in the building of new-energy power stations, hydroelectric power stations, clean-combustion power stations, and nuclear power stations as long as the Chinese partners have control; and supports multinational energy corporations to set up R&D centers in China.
Following the principle of equality, mutual benefits and reciprocity, Chinese energy enterprises are actively involved in international energy cooperation, participating in overseas energy infrastructure projects and expanding cooperation in energy
engineering and services. Ninety percent of Chinese enterprise-invested energy resources abroad are sold locally, thus increasing and diversifying supplies in the global energy market. When investing in foreign countries, Chinese energy enterprises abide by local laws and regulations, and respect the religious beliefs and customs of the local people. They actively make contributions to local economic and social development while achieving self-growth.
For a fairly long time to come, international energy trade will remain the major way by which China utilizes foreign energy sources. China will improve policies for fair trade and optimize the trade structure, and conduct energy imports and exports in accordance with the WTO rules. It will diversify the modes of trade and comprehensively use such methods as futures trade, long-term agreements, entrepot and barter trade. China will actively participate in global energy management. It will intensify exchanges and cooperation with other countries, addressing together the impact of the international monetary system, excessive speculation and energy market monopoly, thereby maintaining the stability of international energy market and energy price.
Energy is of vital importance to economic development and people's well-being. In order to reduce conflicts and inequality brought about over access to energy resources, achieve a stable growth of the world economy and make the economic globalization lead to a balanced, universally beneficial and win-win development, the international community should foster a new energy security concept featuring mutually beneficial cooperation, diversified development and common energy security through coordination. To jointly ensure global energy security, the Chinese government calls for international efforts in the following three aspects:
-- Strengthening dialogues and exchanges. Strengthening dialogue and communication among energy exporting, consuming and transiting countries is the foundation of international energy cooperation. The international community should further cement its bilateral and multilateral ties; increase dialogues and exchanges in the fields of efficient use of energy, energy conservation, environmental protection, energy management and energy policy; promote monitoring and emergency response mechanisms for the global energy market; and deepen the cooperation in the fields of information exchanges, personnel training and coordination.
-- Carrying out effective energy cooperation. Upholding the principles of reciprocity, mutual benefit and common development, the various countries should ensure mutually beneficial cooperation in international energy resources exploration, enrich and improve cooperative mechanisms and methods, increase the international energy supply, and diversify supply channels. They should work together to stabilize the prices of bulk energy commodities, secure the energy needs of various countries, and