اصلاحات تدریجی و ظهور بازار انرژی در چین: شواهد حاصل از آزمون همگرایی قیمت انرژی

This study investigates the emergence of energy markets by testing for convergence of energy prices with a new dataset on energy spot prices in 35 major cities in China. Both descriptive statistics and unit root are employed to test the convergence of energy prices for each of four fuel price series. The whole study period is divided into two sub-periods in order to reconcile the gradual energy reforms. The results show the steady improvement in energy market performance in China, especially during the second sub-period, which suggests that the market appears to be playing an increasing role in determining energy prices. While panel unit root tests show energy markets are integrated in China as a whole, city-by-city univariate unit root tests suggest that there are still many regional energy markets, probably because energy reserves (especially coal) vary widely across regions. Since China's energy economy is gradually moving towards market-oriented mechanisms, the existing literature may become obsolete soon.

The ongoing transition of former communist countries from planned to market economies has been one of the most important economic phenomena in the last few decades. It is interesting, therefore, to consider whether liberalization of domestic trade prompts major shifts in price structures that were highly distorted under central planning (Fan and Wei, 2006). Moreover, in the context of China there is continued debate about whether gradualist reform has been successful (Lau et al., 2000; Young, 2000). Since China embarked on its economic reform and adopted an open door policy in the late 1970s, its economic development has been greatly enhanced by active participation in international trade. However, recently there has been more debate about domestic trade with China's major trading partners urging further opening of the domestic market, especially post-accession to the World Trade Organization (WTO). Moreover, even if the Chinese government removes remaining barriers to international trade, the effectiveness of this policy might be compromised by regional trade barriers within China itself (Fan and Wei, 2006; Poncet, 2003 and Poncet, 2005). It is thus useful to investigate whether domestic markets in China are in fact integrated. One of the most important and potentially interesting and influential markets to investigate for evidence of integration is the energy market. China is undergoing a period of rapid increases in energy consumption which are likely to continue for some decades. Primary energy consumption in China has risen 70% in the last decade, compared with a 13% rise in OECD countries and 30% for the world as a whole. Since 1996, rising demand has turned China from a net energy exporter to a net energy importer, with consumption more than 10% above production since 2005. This switch is even more marked for petroleum products; China produced 35% more oil than it consumed in the mid 1980s, but nearly one-half of total oil consumption had to be imported in 2005. China's net imports of petroleum and products have more than doubled, from 75.8 million metric tonnes (mmt) in 2000 to 168.3 mmt in 2006 (CSY, 2007). Given the current petroleum trade situation, some have attempted to predict China's energy demand (Chan and Lee 1996; Sinton and Fridley, 2000; Crompton and Wu, 2005). Such studies rely on a link between changes in China's aggregate economy and energy use, which may be affected by ongoing energy market reforms. Hence, it may matter which economic environment, the aggregate economy or the energy economy, is used to produce predictions of energy consumption. Another important feature of the energy market in China is the fact that energy intensity (the ratio of energy consumption to output) is high by international standards, at 0.91 ton oil equivalent per thousand US$ GDP (at 2000 price base in 2005) compared with 0.32 for the world as a whole and just 0.19 in OECD countries (CESY, 2007). Given China's economic size and high energy intensity, any improvements in energy efficiency will affect world energy demand and in turn the world energy price. While a large literature has studied changes in China's energy intensity (Garbaccio et al., 1999; Zhang, 2003; Fisher-Vanden et al., 2004; Liao et al., 2007; Qi et al., 2007; Zhang and Ding, 2007; Ma and Stern, 2008), few studies have investigated whether specific features of the energy market have been playing a critical role. Yet, energy efficiency depends on the energy pricing mechanism for the allocation of energy resources, and also energy prices have a potential impact on energy intensity in China (Lam, 2004; Qi and Chen, 2006; Hang and Tu, 2007). As argued above, despite the importance of energy prices and energy market integration in China, the literature in several key areas ignores this issue, for example, many studies investigate the potential cointegrating relationship between China's energy consumption and economic growth (Shiu and Lam, 2004; Chen et al., 2007; Yuan et al., 2007 and Yuan et al., 2008; Lee and Chang, 2007 and Lee and Chang, 2008; Zou and Chau, 2006; Wang et al., 2005). However, any long-run cointegrating relationship identified by these studies is conditional on the continuation of the current energy regulation system. The cointegrating relationship would potentially change or even disappear if the current energy regulation system is changed and this would crucially affect any future predictions or forecasts. Since China's energy economy is still in transition with resource allocation gradually moving towards market-oriented mechanisms ( Lau et al., 2000; Xu and Chen, 2006; Wang, 2007; Fan et al., 2007), the existing literature may quickly become obsolete. A particular literature which should be concerned about energy market integration in China is that which examines the role played by the price of energy in determining economic growth and inflation rates (Adrangi et al., 2001; Asche et al., 2003; Stern, 2000; Girma and Paulson, 1999; Gjolberg and Johnsen, 1999; Shaked and Sutton, 1982). Given China's high energy intensity and economic size and global influence, it is surprising to find that little work along this line has been done in China. One reason for this lacuna may be a concern as to whether there is a market-oriented energy economy in China. The absence of attention to energy market integration in China is also surprising as integration and the emergence of a market economy has been shown for China's agricultural commodity sector (Zhou et al., 2000; Huang and Rozelle, 2006), and in many other countries, energy market integration has been extensively investigated (Asche et al., 2002 and Asche et al., 2006; Bachmeier and Griffin, 2006; De Vany and Walls, 1999; Narayan and Smyth, 2005; Adrangi et al., 2001; Asche et al., 2003; Gjolberg and Johnsen, 1999; Serletis, 1994). Yet, only one study, Fan and Wei (2006), considers China, and their study tests for the existence of price convergence of only gasoline and diesel, which one might expect, a priori to be the most likely energy sources to show market integration. Moreover, Fan and Wei (2006) did not consider the effect of gradual reforms in China. To the best of our knowledge, therefore, there has been no specific study of energy market integration using data from China, which also considers the two other key energy sources, coal and electricity. Given the fundamental importance of understanding the emergence of an energy market to studies of China's economic growth and energy economy, this paper is concerned with testing the spatial convergence of energy prices. We use a new, high frequency, dataset on spot prices of four energy types (coal, electricity, gasoline and diesel) from 35 cities collected at 10-day intervals over a maximum of 132 months (from 1995 to 2005). We also crucially consider the impact of China's gradual energy reforms on the formation of energy markets. We first use our data to sketch a descriptive picture of how China's energy prices converge in markets separated by long distances. Then we examine how price data points from different markets across space (but during the same period) relate to each other graphically (which is done by tracing out transportation gradients in China's coal, electricity, gasoline and diesel markets). Finally, we employ a panel unit root approach to test the convergence of energy prices as a whole (Banerjee, 1999; Maddala and Wu, 1999). The study is organized as follows. In Section 2 we introduce and discuss the energy price data sets and preliminary analysis. This is followed in Section 3 by discussion of price trends and spatial patterns of market emergence. Section 4 presents univariate and panel unit root tests and tests for energy price convergence. Section 5 comprises a discussion of energy market from an international perspective. The final Section 6 presents conclusions and implications.

In this study, we have shown, in a number of ways, the steady emergence of energy commodity markets that have occurred in China during the study period. Regardless of whether we use descriptive statistics or more formal techniques, our results are consistent with the emergence of markets for coal, electricity, gasoline and diesel. Moreover, energy markets are robust when viewed across space and time. Although those who visit China are not surprised, such a picture of integrated energy markets may be surprising when juxtaposed against the policy background. Even during the first sub-sample period, China took a gradualist approach to reforming its energy markets. Our results show that despite the gradualist policy, the operation of energy markets have steadily strengthened in China. China's market reforms have really been based on entry-driven competition. In the case of China entry has come from both the dismantlement of the state-own enterprises and the emergence of more energy companies. While this has produced an increase in integration and fall in transaction costs that has been documented in the paper, it is also eroded the power of the state to control the energy markets with traditional command methods. Our results suggest that if policymakers actually want to control energy markets in the future, they need to devise new ways to intervene in the energy sector, otherwise the reforms they have introduced have clearly led to a more market-oriented energy sector. Although we have tested for energy price convergence, our results suggest China's energy economy is still in a state of transition. However, as the market economy is more efficient in resource distribution, one would expect that China's high energy intensity will be affected by energy market reforms despite the fact that other factors still play an important role in improving a firm's performance and reducing energy consumption. This suggests that further energy market reforms can reduce China's energy intensity and in turn energy imports and the impact of China's energy import on the world energy supply and prices. Hence, the former predictions of China's energy demand may need to be reviewed and with cautions. It should be noted that though energy prices are convergent across markets, the market process is apparently different across energy types. The results show that gasoline and diesel are more likely market-oriented than coal and electricity. The price reforms of electricity and coal relevant to electricity generation were late and slow. Therefore, how to speed-up price reforms of electricity and coal relevant electricity generation is a great challenge China has to face. Panel unit root tests demonstrate the convergence of energy prices, however, univariate ADF unit root tests clearly display there are still some regional markets in China for certain types of fuel. This is likely related to the unbalanced distribution of energy reserves, especially for coal. As a result, transportation plays an important role in final user price formation of coal due to huge long-distance transportation cost. Reforms of the transportation sector, therefore, particularly the railway, may become a major determinant in the process of price convergence for coal prices across markets and regions.