China sets up energy commission

Beijing - China said on Wednesday it had set up a national commission to coordinate energy policy, as the Asian giant's soaring power needs are increasingly forcing it to look abroad for supplies.

"To strengthen strategic energy policy and coordinate overall planning, the State Council has decided to establish a National Energy Commission," said a statement by the council, China's cabinet.

The commission, headed by Premier Wen Jiabao, will formulate a "national energy development strategy," review energy security and development issues, and coordinate international cooperation, it said.

Besides Wen, the 23-member commission will include several of the country's ministers, including those with the finance, foreign affairs, commerce and environmental protection portfolios, according to the statement.

China has embarked in recent years on an aggressive campaign to secure overseas energy supplies to satisfy sky-rocketing demand fuelled by its fast-expanding economy and its citizens' increasingly consumptive lifestyles.

Analysts said that while the body's exact powers so far remain unclear, its establishment appeared aimed in part at putting Chinese government muscle behind overseas deals typically done by individual state-owned energy firms.

"Such deals, conducted by a single company, have often met with various difficulties," said He Jun, a Beijing-based economist with Anbound Consulting.

"China is facing a new era of energy collaboration and the changing situation has led to a new policy-making body."

Tom Grieder, an analyst at IHS Global Insight, said the move was also a bid to centralise decision-making currently spread across a range of government agencies.

He added there have been growing calls for a firmer hand at the top as overseas resource deals have increased, and amid recent natural gas and coal shortages.

"There has been a lot of pressure recently, particularly from industry groups, for an overall agency to coordinate things better. There are a lot of reasons for this," Grieder said.

Parts of the country have been hit by supply shortages of coal and natural gas amid unusually cold winter weather that forced millions to turn up the heat.

Snowstorms have meanwhile led to some disruptions of distribution of coal, source of 70% of China's needs.

Beijing also late last year announced ahead of the Copenhagen climate change summit that it would embark on a major energy efficiency drive to curb growth in its world-leading greenhouse gas emissions.

And it has set a goal of generating 15% of its energy from renewable sources - mainly wind and water - by 2020.

"Obviously meeting China's future energy consumption is a national security issue so I think China will want to coordinate that policy much better than it has been," Grieder said.

China also has faced charges of "neo-colonialism" over a spate of large energy resource deals involving countries in Africa, with critics saying it has cosied up to pariah regimes such as Sudan in its lust for oil.

- AFP