VZCZCXRO6157
PP RUEHCN RUEHGH
DE RUEHBJ #0291/01 0350945
ZNR UUUUU ZZH
P 040945Z FEB 10
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 7919
INFO RUEHOO/CHINA POSTS COLLECTIVE PRIORITY
RHEBAAA/DEPT OF ENERGY WASHINGTON DC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEAEPA/HQ EPA WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

UNCLAS SECTION 01 OF 03 BEIJING 000291 
 
SENSITIVE 
SIPDIS 
 
STATE PASS USTR 
STATE FOR EAP/CM-BRAUNOHLER 
STATE FOR EEB/ECS 
STATE FOR OES, OES/EGC, and OES/ENV 
USDOE FOR INTERNATIONAL 
USDOC FOR 4420 
EPA FOR INTERNATIONAL/MKASMAN 
 
E.O. 12958: N/A 
TAGS: ECON ENRG EINV SENV CH
SUBJECT: China/Energy: New Energy Commission Aims to 
Coordinate National Policy 
 
SENSITIVE BUT UNCLASSIFIED: NOT INTENDED FOR 
INTERNET DISTRIBUTION 
 
¶1. (SBU) Summary: China's State Council announced 
January 27 the creation of a new National Energy 
Commission (NEC) headed by Premier Wen Jiabao, with 
Vice Premier Li Keqiang serving as NEC deputy. 
According to the State Council's announcement, the 
NEC aims to strengthen China's energy policy 
formulation and coordination, oversee an energy 
development strategy, examine energy security issues, 
and synchronize overall planning for large-scale 
domestic and international energy projects.  Energy 
industry observers told us there would be few 
changes to current energy policies and viewed the 
NEC as a compromise step that fell short of the 
elusive goal of establishing a true energy ministry. 
A review of the NEC's members indicates China 
remains focused on energy supply and energy security 
issues, with less weight placed on energy efficiency, 
conservation or climate change.  End Summary. 
 
NEC A "POSITIVE STEP FORWARD"... 
-------------------------------- 
 
¶2. (SBU) The January 27 State Council announcement 
of the creation of a new, 21-member National Energy 
Commission headed by Premier Wen Jiabao and Vice 
Premier Li Keqiang was a "positive step forward" and 
demonstrated the importance Chinese leaders place on 
energy issues, according to a longtime Beijing 
energy analyst.  While our contact doubted it would 
succeed in pushing through major reforms, he 
predicted the NEC could successfully coordinate 
energy policies across China's sprawling bureaucracy. 
He said the National Energy Administration (NEA), 
which was created in March 2008 to formulate and 
implement energy policy, did not have the authority 
to carry out this mandate, particularly vis-a-vis 
China's powerful state-owned energy companies. 
 
¶3. (SBU) A government relations official at an 
American energy company agreed, saying the NEC would 
provide NEA with greater clout in dealing with other 
ministries and large state-owned energy firms. 
Based on his conversations with Chinese officials, 
he said NEA would act as the NEC's secretariat and 
be charged with implementing policy decisions 
reached by the new commission. 
 
...BUT ONLY AN "INTERMEDIATE STEP"... 
------------------------------------- 
 
¶4. (SBU) The local industry analyst viewed the 
creation of the NEC as a compromise decision that 
reflected the difficulty in managing different 
interests in China's energy sector.  He said many 
officials believed China needed to establish a true 
ministry of energy to oversee strategic energy 
issues, especially the development of national oil 
companies (NOCs) such as CNPC and Sinopec.  A 
researcher at the State Council's Development 
Research Center (DRC) echoed this view, noting that 
under the current system, China's NOCs were 
supervised by SASAC but energy policy was set by NEA 
and NDRC which allowed the NOCs to effectively 
ignore both bodies.  He said the NEC should enable 
the government to improve coordination across all 
ministries and state-owned energy companies. 
 
... BUT BUREAUCRATIC HURDLES REMAIN 
----------------------------------- 
 
¶5. (SBU) An official of a Chinese government energy 
association, who previously worked in the Ministry 
of Industry and Energy before it was dissolved in 
1993, said the NEC would continue to face 
 
BEIJING 00000291  002 OF 003 
 
 
bureaucratic obstacles despite its high-profile 
leadership.  He said China's energy issues touched 
upon many different ministries and agencies, and it 
would be difficult to reach agreement on contentious 
issues such as energy price reform.  He said he 
believed the only workable solution would be for the 
eventual creation of an energy ministry. 
 
WHO'S IN... 
----------- 
 
¶6. (SBU) Industry contacts were struck by the 
composition of the NEC (see para 8 for full list of 
members) which includes the Minister for State 
Security (MSS) and the deputy chief of the PLA's 
General Staff office.  An industry contact said this 
reflected China's focus on energy supply and energy 
security questions which have received greater 
attention as China becomes more dependent on 
overseas energy resources. 
 
...WHO'S NOT 
------------ 
 
¶7. (SBU) A clean energy consultant told us February 3 the 
NEC's makeup appeared to minimize the importance of 
energy efficiency, conservation and climate change issues. 
For example, the NEC does not include the Ministry of 
Housing and Urban-Rural Development (MoHURD) which sets 
important energy efficiency standards for housing and the 
construction sector.  Also, the Ministry of Agriculture 
was not included suggesting less interest in biofuels. 
The DRC researcher said it was also unclear how the NEC 
would interact with the Leading Working Group on Climate 
Change, which is headed by Premier Wen, with Vice Premier 
Li as deputy.  NDRC Vice Chairman Xie Zhenhua, China's 
lead climate change negotiator who has ministerial rank, 
was conspicuously absent from the list of commission 
members.  Beyond climate change, Xie is also responsible 
for energy efficiency. 
 
NEC COMPOSITION 
--------------- 
 
¶8. (U) According to the State Council's Chinese- 
language January 27 announcement, the NEC will be 
led by Premier Wen Jiabao as NEC Chairman and Vice 
Premier Li Keqiang as NEC Vice Chairman.  The 21 
commission members include: 
 
-- You Quan, State Council Deputy Secretary General; 
 
-- Zhu Zhixin, Central Leading Group on Economic and 
Financial Affairs and NDRC Vice Chairman; 
 
-- Yang Jiechi, Minister of Foreign Affairs; 
 
-- Zhang Ping, NDRC Chairman; 
 
-- Wan Gang, Minister of Science and Technology (MOST); 
 
-- Li Yizhong, Minister of Industry and Information 
(MIIT); 
 
-- Geng Huichang, Minister of State Security (MSS); 
 
-- Xie Xuren, Minister of Finance; 
 
-- Xu Shaoshi, Minister of Land and Resources; 
 
-- Zhou Shengxian, Minister of Environmental Protection; 
 
-- Li Shenglin, Minister of Transport; 
 
-- Chen Lei, Minister of Water Resources; 
 
-- Chen Deming, Minister of Commerce; 
 
BEIJING 00000291  003 OF 003 
 
 
 
-- Zhou Xiaochuan, Chairman of People's Bank of China; 
 
-- Li Rongrong, Chairman of State-owned Assets 
Supervision and Administration Commission (SASAC); 
 
-- Xiao Jie, Director of State Administration of Taxation; 
 
-- Luo Lin, Director of State Administration for Work 
Safety; 
 
-- Liu Mingkang, Chairman China Banking Regulatory 
Commission; 
 
-- Wang Xudong, Chairman of State Electricity Regulatory 
Commission (SERC); 
 
-- Zhang Qinsheng, Deputy Chief of the General Staff; and 
 
-- Zhang Guobao, NDRC Vice Chairman and NEA Administrator. 
 
¶9.  (U) NDRC head Zhang Ping serves as the director of 
the NEC office and NEA Administrator Zhang Guobao serves 
as the NEC office vice director. 
 
HUNTSMAN