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 central and western regions and along the coast. But, the consumers of energy resources are mainly in the southeast coastal areas, where the economy is the most developed. Such a great difference of location between the producers and the consumers has led to the following basic framework of China's energy flow: large-scale transportation over long distances of coal and oil from the north to the south, and transmission of natural gas and electricity from the west to the east.

— The development of energy resources is fairly difficult. Compared with other parts of the world, China faces severe geological difficulties in tapping its coal resources, and has to get most of its coal by underground mining, as only a small amount can be mined by opencast methods. Oil and gas resources are located in areas with complex geological conditions and at great depths, so advanced and expensive prospecting and tapping techniques are required. Untapped hydropower resources are mostly located in the high mountains and deep valleys of the southwest, far from the centers of consumption, entailing technical difficulties and high costs. Unconventional energy resources are insufficiently prospected, their development is neither economical nor competitive.

Since the reform and opening-up policies were introduced in China in the late 1970s, the country's energy industry has witnessed swift growth and made great contributions to the sustained and rapid growth of the national economy, with the following demonstrations:

— The energy supply capability has been remarkably enhanced. Thanks to the efforts made over the past few decades, China has built an energy supply framework with coal as the main energy resource and electricity as the focus, featuring an overall development of oil, gas and renewable resources. A fairly complete energy supply system is now by and large in place. China has built a group of extra-large coalmines each with an annual output of over ten million tons. In 2006, the output of primary energy equaled 2.21 billion tons of standard coal, ranking second in the world. Of this, raw coal accounted for 2.37 billion tons, 5