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“China is by far the world’s top coal producer and consumer, using about 42 percent of the world’s thermal coal for generating power and 48 percent of its metallurgical or coking coal for making steel. It uses more coal than the United States, Europe, and Japan put together” (Callick 2007). China is not renowned for its emphasis on human rights and efforts to curb pollution to minimize environmental and human health concerns, China’s membership in several multinational economic and other groups has required it to take matters of public health and environmental accountability seriously, especially as negative actions could damage China’s economy overall, from the economy in Hong Kong to the trickle down to other small rural provinces.
With these matters in mind, an Atlanta-based company called CoalTek is poised to have potential success in China as it offers a cleaner solution to solid fuels that does not deviate far from existing coal technologies and thus is almost immediately practicable at enormous benefit to the people of China as well as the country more generally.
As stated in their brief purpose declaration, Atlanta-based CoalTek (http://www.coaltek.com) has “developed and commercialized a cost-effective, preburn treatment process that physically and chemically transforms low-rank, mine-run coals into stable high BTU, clean coal fuel alternatives.” What is not stated on the company’s main page is of the utmost importance for China as a global leader in coal consumption and production, which is that this conversion process, which takes otherwise low-grade and nearly unusable raw coal, ends up being “at or below the world’s highest quality raw coals” costs.
In short, the company offers a coal that is clean-burning and that is roughly on par with the amount of money China or other potential markets would already be paying, thus for all purposes, this seems like a viable source to both curb environmental and health damage for the current and future generations while appeasing organizations China belongs to that strictly monitor these issues. Since China is by far the biggest consumer and producer of these coal products, it is natural that this would be a prime market for CoalTek and would benefit all levels of society as well as the governmental and private sector interests at stake.
Before discussing the unique political and legal aspects of China and the possibilities of expanding a business there, it should be noted that unlike many other nations, the state of these issues is often open to debate and is also constantly changing based on outside pressures to conform to more Westernized notions of what is and is not acceptable. This information on China can differ from day to day and is dramatically different than might have been reported even five years ago and is also highly context-dependent. In other words, while some aspects of the political or legal structure might be open and transparent in some situations, in contexts they are not at all, thus offering an actual presentation of China’s structure is fraught with as many questions as answers. Nonetheless, since China has had an increased emphasis in the last couple of years on opening up its system and aiming for greater fairness in political and legal spheres, it can be suggested that their system is cautiously open to new ideas from the West, particularly where energy is concerned, as it would be in this proposed introduction of CoalTek into the Chinese market.
Again, the shifting nature of China’s effectiveness in terms of freedom and fairness in legal and political matters, especially as they relate to transparency, which is a particular problem in the electoral process, cannot always be quantified for many commercial businesses entering the market, but for something as vital to the economic and public health of the country as energy, CoalTek’s potential to enter the Chinese market might be greater than that of other material businesses entering from Western markets.
The political and legal structure of China is significantly different from those in place in many developed Western nations, in terms of both the extent to which the government is involved in the lives of its citizens as well as the economy more generally. The Chinese Communist Party (CCP) is, despite relatively recent efforts toward an increased emphasis on democratization and liberalism, a mostly authoritarian state and the CCP exerts control over most private enterprises and owns a great share in the economy alongside (and often with great oversight of) other private business ventures, especially in urban centers. On a more localized level, each of China’s state is part of the National People’s Congress (NPC) which, in a loose structural sense, is akin to the United State Senate without the same level of transparent and completely fair elections by members of the states being represented, and which governs more province-oriented matters and answers directly to the CCP. In other words, while there is a congressional authority in China, it is a largely superfluous organization when it comes to major matters of national or international importance.
The legal system in China has at its very core the same values of the CCP at heart, despite the existence of the Chinese Constitution, which seeks to protect human rights and many processes and issues related to basic freedoms, but is not held to the same end-all status the United States Constitution, as an example, is in a court of law. In short, while there are several legal treaties that exist for China’s political governance system, these are not always the first indicator for whether a practice or correct or legal; in the end the ultimate discretion is given to party leaders, not the people, and not the Constitution or legal system. While there have been significant efforts to revolutionize this legal system and more generally, the authoritarian political structure, it is an ongoing process. Just as in the case with the energy sector and its negative environmental and public health impacts, however, international pressure seems to be the primary impetus to change, thus the Chinese Constitution is expected to undergo further revisions and more adherence as time goes on.
With these aspects of China’s political and legal structure in mind, it is accurate to suggest that while there are elections that are free, this is only in the sense that anyone can take part in elections and vote for whomever they choose, although this is generally only beneficial at the very local (village) level in terms of fairness and despite the outcomes of elections, the ruling party (the CCP) is always the undisputed victor. In short, despite the presence of elections themselves, the extreme lack of transparency into the election process renders election procedures in China almost useless as the voice of the people is generally not the sole foundation for who becomes elected. The National People’s Congress is comprised of individuals elected by each of the constituent states, however again, it is extraordinary rare that those elected offer any dissent to the ruling majority thus again rending the outcomes of Chinese elections questionable at best.
Although China has made significant strides in the past two decades to migrate from a strict government-controlled economy, these elements still exist, although this is an ever-increasing emphasis on becoming a market-based economy. These changes are evidenced by the relatively recent entry and maintenance of conditions to continue China’s membership to APEC and the WTO. Most of the structure in the Chinese economy is still based on the centrally-run system but due to pressure from international organizations and more importantly, based on the success of the increasing market economy that has made China the second largest economy in the world, the trend toward the free market approach continues to grow. Nonetheless, institutions such as the People’s Bank of China exert great control over businesses large and small, even if they are not state-run or sponsored and this institution can be seen in many ways as the economic branch of the CCP and governs nearly all procedural aspects of all businesses that are not managed by the state and a growing number of these private enterprises exist.
Without exception, China is a difficult market to navigate in the context of international business but with Coaltek’s alternative energy method that will both rely on existing coal technologies and infrastructure and will provide enormous environmental, public health, and economic benefits (which will come as a result of China not having to eventually use only high-grade coal and being able to use otherwise dead supplies through cleaning—not to mention the amount saved on public health and environmental cleanup efforts.) Given its dominance in world markets, especially as the dollar is no longer a reliable symbol abroad, China would be well-positioned to not only accept this technology from CoalTek on a functional level for provision of same-cost fuels, but it would also appease international watchdog and regulation groups and improve public health and already quit severe environmental problems.
References
Callick, R. (2007). All the coal in China. American: A Magazine of Ideas,1(4), 24-30.
China: Country Review. (2008) In CountryWatch [Web], New York: CountryWatch. Retrieved 10/11/2008 from http://www.countrywatch.com/login.aspx?err=5it=review.
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