The Energy Market Authority (EMA) of Singapore hosted the SIEW Energy Insights in Shanghai on 23 May 2016 to discuss the latest energy developments in China. The panel featured Dr Liu Qiang, Director of Energy Economics Division, Institute of Quantitative & Technical Economics, Chinese Academy of Social Sciences (CASS), Dr Yu Hongyuan, Director, Institute of Comparative Politics and Public Policy, Shanghai Institutes for International Studies (SIIS), and Professor Gu Anzhong, Secretary General, China LNG Association.
The panel discussion covered the new energy realities China is facing, as well as the opportunities and challenges these present. Other topics included the impact of oil prices being lower for longer on energy investments and security, and how Chinese government agencies and companies should respond to these “new realities” in terms of policies and strategies.
Find out more about the panellists’ views and perspectives on these topics below:
Dr Yu Hongyuan, Director, Institute of Comparative Politics and Public Policy, Shanghai Institutes for International Studies (SIIS)
With the internationalisation of the Chinese yuan, would the currency be used in natural gas pricing?
YU HONGYUAN: This might be difficult and the benefits of using the yuan in natural gas pricing remain to be seen.
What is more important is for China to restructure its domestic market and grow its middle-class and increase per-capita income so that more Chinese families can afford LNG. It may not be sustainable for LNG demand to be driven by national policies and initiatives alone.
Dr Liu Qiang, Director of Energy Economics Division, Institute of Quantitative & Technical Economics, Chinese Academy of Social Sciences (CASS)
Since China is the world’s biggest natural gas consumer, would China be able to have more influence over gas pricing? Could Shanghai become a gas trading centre?
LIU QIANG: The trading of commodities is largely influenced by the United States. While China may not have much influence over gas pricing now, China could still participate actively in the global LNG discussions.
On a gas trading centre, what is needed is a sound environment which will allow for low transaction costs and a strong pool of financial professionals. Any city, be it Shanghai or Singapore, can be a gas trading centre.
Shanghai definitely has the potential to be a gas trading centre. What we need now is time and patience to hone the necessary skillsets to better manage the market.
Professor Gu Anzhong, Secretary General, China LNG Association
What are the biggest risks or bottleneck areas in China’s LNG development?
GU ANZHONG: It is important to consider not just the upstream, but also the LNG mid- and downstream sectors.
For example, China is currently exploring the use of LNG in the transport sector. However, it is not as simple as it seems. China needs to spend time to examine other aspects such as safety, the combustion process and other technical issues.
SIEW 2016 will be held at the Sands Expo and Convention Centre at Marina Bay Sands Singapore from 24 to 28 October 2016. Registration will open on 1 July 2016. For more energy insights, please visit www.siew.gov.sg.