China Reform Monitor: No. 1020

February 21:

Beijing will tax carbon dioxide emissions as part of new measures to address worsening pollution, the United Press International reports. Jia Chen, head of the Ministry of Finance’s tax policy division, said the government should reform its tax regime to help lower energy use and reach emissions targets. Jia did not mention tax amounts or a timetable, but in 2011 the ministry proposed a levy starting at $1.60 per ton of carbon and rising to $8 per ton by 2020. Jia said the government would also begin taxing coal based on price instead of sales volume. Other mining products and water will also be subject to new levies. As part of the 12th five-year plan for 2011-15, emissions trading schemes have been launched in Beijing, Tianjin, Shanghai, Chongqing, Guangdong and Hubei.

February 25:

China’s state-run oil and gas companies continue to increase their foothold in North America. This week Sinopec, the biggest refiner in Asia, purchased a 50 percent stake in oil and natural gas-rich land in northern Oklahoma from Chesapeake Energy for $1.02 billion. The joint venture involving 850,000 acres holds about 140 million barrels of oil in proven reserves and currently produces about 34,000 bpd, the Associated Press reports. Chesapeake, which is selling off assets to repay debt, will get 93 percent of the money upfront and the rest after certain conditions are met. Future exploration and development costs will be shared jointly, but Chesapeake will operate the project and conduct all drilling, operations, and marketing work, etc.

[Editor’s Note: China’s CNOOC recently acquired Canada’s Nexen Inc. for $15.1 billion and in December PetroChina announced it would pay $2.21 billion to Canada’s Encana Corp. for a 49.9 percent stake in acreage in Alberta. The recent successes in North America are a turnaround from 2005, when U.S. authorities stymied CNOOC’s proposal to buy American oil producer Unocal.]

While meeting at the Great Hall of the People in Beijing with Lien Chan, the honorary head of Taiwan’s ruling Kuomintang (KMT), Chinese leader Xi Jinping reaffirmed China’s desire to control Taiwan, ABC News reports. The meeting was a symbolic gesture highlighting CPC-KMT ties following Xi’s elevation to CPC leader. Cross-Strait trade is thriving as are transport and investment links, although Taipei has yet to agree to any official political talks. The new CPC leadership will “pragmatically forge ahead” to develop ties and push for unification, Xi said.

February 26:

To curtail official power abuses 121 Chinese intellectuals have signed a petition urging the National People’s Congress to ratify the International Covenant on Civil and Political Rights, which China signed in 1998. Ratification, the petition said, would “promote and realize the principles of a country based on human rights and a China governed by its Constitution. We fear that due to the lack of human rights and absence of fundamental reverence and assurances for individuals’ freedom, rights and dignity, if a full-scale crisis breaks out, the whole society will collapse into hatred and brutality.” The letter appeared on Chinese blogs and Internet forums, was removed, but then quickly reposted. “The new leadership has expressed its commitment to rule of law and we want those words to be acted on,” said He Weifang a law professor at Peking University. This week Xi Jinping told the 25-member Politburo: “Any organization or individual must act within the Constitution and the laws,” The New York Times reports.

February 27:

Barring last-minute changes, Wang Yi, China’s ambassador to Japan (2004-2007), will be appointed foreign minister during China’s annual National People’s Congress, Reuters reports. A fluent Japanese speaker, Wang served as China’s top representative to the North Korea six-party talks (2007-2008) and as minister counselor at China’s Embassy in Tokyo (1989-1994). Wang will replace Yang Jiechi, who will be promoted to handle foreign policy as one of China’s five state councilors – a post senior to foreign minister. Vice Foreign Minister Zhang Zhijun is expected to become minister of the CPC International Department, where he was vice minister (2000-2009). Vice Foreign Minister, Cui Tiankai, will be China’s next ambassador to the U.S.