The Research Of China's Coal-electricity Vertical Relation

It plays an important role in keeping sustained, steady and healthy development of our national economy,to keep harmonious development of the industries of coal and electricity. However,for the different Market-oriented reforms processes of the two, during the process of the economic system transition,there appears the coexistence of "planned electricity" and "marketed coal",and the conflict of the two occurs from time to time, more serious and prominent in the case of price fluctuations of coal for electricity, seriously affecting the economic and social stability.As to the solution to the conflict of the two,the scholars,at home and abroad,have been conducting extensive and in-depth study and discussion.Most domestic scholars believe that the status of cattle results from the different price mechanisms of the two,that is "marketed coal" and "planned electricity". From this,it is reasonable and urgent to implement the policy of the coal and electricity prices'linkage,but it is just a transitional measure, quite upset.But,if the conflict of coal and electricity can be fundamentally resolved,it is the best way to realize vertical integration between the two, by backward meger in order to ensure the steady supply of coal resources, which requests accelerating the market-oriented reform of the electricity industry. However, some scholars believe that, the reasons of coal prices increasing being the key,and the conflict of coal and electricity,becoming increasingly sharp, are the results of institutional mechanism conflicts, but not the reason of transaction costs.At the same time,the vertical integration may bring increasment of the management and supervision costs, and so on, which may be harmful to harmonious and healthy development relationship between coal and electricity. Some other scholars believe that the contradictory problems'solution, based on actual conditions and taking into account the interests of every party, hardly depends on the integration or non-integration, but contractually strategic alliances between coal and electricity, occupying the advantages of both the integration and non-integration, are more conducive to the solution of current issues. And,in 2008,China exploited the opportunity when the financial crisis happened to start the restructuring of coal industry,incresing industrial benefit, but at the same time,improving industrial concentration, which changes the comparison of powers between the two during the negotiations,and brings a significant impact on the settlement of conflicts,more difficult to resolve through integration or non-integration.Under the theoretical conflicts and practical background, this article tries to interprete coal-electricity issues. Firstly, theere is a brief review of coal industry,electricity industry,and related macro-economic situation, then a brief review of the literature and summary of research. Secondly, processes of China's coal and electricity industries'reforms,and the both ndustrtry's haracteristics,are described and analyzed.And through the analysis of coal-electricity prices linkage policy and the effect of coal re-structuring,it is believed that the price linkage policy has already come to the end,and that the coal re-instructuring changes the comparison of powers between the two during the negotiations, and has been changing the negotiation mode.On this basis, the market theory, integration theory and the vertical strategic alliance theory are compared with China's actual conditions, through the game theoretic analysis of the behaviors of both sides of coal and electricity, holding that, for the disappearing of the effect of the linkage policy, the change of the bargaining powers and the unfinished electricity industrical reform,the former two theories are not consistent with the contradictory reality, that is, the two theories play little practical significance in the solution to the contradiction. However, contractual vertical strategic alliance, occupying the advantages of both the theories, are more suitable for the solution to the factful problem, ensuring that both economies of scale of coal industry and electricity industry are realized, avoiding enormous organizational and management costs brought about by the integration.At the same time, it can ensure a harmonious and stable bilateral relation, playing an important role in keeping our national economy's stability and sustaince. Based on the above analysis, this paper argues that it is impotant to solve the problem by vertical strategic alliance,but effective use of contractually vertical strategic alliance to address the coal-electricity contradictions, needs many related auxiliary measures, coordinatedly, such as the electricity market reform, solution to transport bottlenecks, and the construction of coal futures markets, etc.And it is not reasonable to solve the coal-electricity contradictions just in terms of the problem,seperately,but should be placed in the larger industrial chain,that is national economy,in order to better solve the problem.After the analysis and introduction into the contradictions of coal and electrcity of latest current affairs, under the introduction of fluctuations in coal demand,the behaviors of the two parties and the effects are dynamically analyzed, by using game theory analysis tools, holding that contractual strategic alliance is more suitable in China,.The way to analyze is closer to we country's reality, and more conducive to real problems. These are all of the innovating points. And I hope that the paper will provide a relatively new idea to solve the coal-electricity problem, ensuring that they can guarantee both industries' specialized production,accompanied by good interactions between the two, also ensureing the smooth and healthy operation of the national economy. However, limited by the knowledge level,and a deeper analysis of the problem can not be done, There are more theoretical analyses, less empirical analysis,far away from the effcet of the problem'real solvement,and less forward-looking analyses. But these also become the directions and focuses of continuing study of the problem in future.