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October 26, 2006
The Hurun Report, a luxury business magazine known for its annual surveys of China’s wealthiest citizens, recently released its 2006 China Energy Rich List, which ranks the wealth generated from the nation’s booming energy sector. Shi Zhengrong, a solar energy tycoon, tops the list with a personal wealth of US$1.95 billion, followed by Jia Tingliang and Wang Suolan with the coal company Shanxi Datuhe Coke & Chemicals, with US$525 million.
While entrepreneurs from traditional energy industries such as coal mining, oil and gas distribution, and power generation still dominate the energy “rich list” (occupying more than half of the fifty spots), the share of wealthy Chinese representing the “clean energy” sector—which includes solar and wind power, batteries, bioenergy, incineration power generation, and thermal energy—has increased to 14, up from only 4 last year. Rupert Hoogewerf, CEO of the Hurun Report, concedes that “valuing the wealth of China’s Rich is as much an art as it is a science,” but believes the list offers a useful glimpse into the dynamics of China’s energy market and illustrates how private companies struggle to share the energy pie with their state-owned counterparts.
According to Shanghai Security Daily, the 2006 list reflects two main trends: the ongoing restructuring of China’s traditional coal mining industry, and the rapid entry of private companies into the clean energy field. The coal industry restructuring, which is being overseen by the National Development and Reform Commission (NDRC), is intended to accelerate technological modernization and improve the industry’s ability to meet projected growth in demand—as well as protect the environment and improve industrial safety, according to Xinhua News. Under new policies, several large private coal companies have been able to merge, renovate, and regroup smaller mines, enter the overseas market with their competitive costs, and switch to deep coal refining. These activities have contributed to the emergence of several new tycoons.
Unlike those in traditional energy industries (also known as “black gold” industries), investors in the clean energy field have been able to strike it rich by adopting cutting-edge clean technologies. In addition to rich-list leader Shi Zhengrong, who has built Suntech Power into one of the world’s leading solar cell manufacturers, five other Chinese entrepreneurs have generated large amounts of wealth for themselves by investing in solar technologies. Another clean-energy giant is Yu Jianqui, the head of Gushan Group, a leading biodiesel producer in China, who ranks fifth overall with a personal wealth of US$400 million.
Dr. Wu Daohong, who heads Beijing Shenwu Thermal Energy Co., Ltd. (BSTET), a company dedicated to the research and development of energy-efficiency technologies, ranks 21st on the list. His firm recently became the first Chinese member of the Chicago Climate Exchange, a U.S.-based greenhouse gas emissions registry, reduction, and trading system. Clean technology has also fostered the emergence of “green” heroes in the power generation industry. Dou Zhenggang, president of Jinjiang Group and No. 11 on the list, owns China’s largest private company that generates power from waste incineration, with more than 10 facilities across the country.
State-owned companies continue to dominate China’s fossil fuel industry, making it difficult for private enterprises to make their mark in petroleum exploration and refining (though they are involved to some degree in distribution). However, the Chinese government has encouraged broad participation from all sectors in developing the nation’s renewable energy market. On February 28, 2005, the State Council (China’s parliament) passed the Law on Renewable Energy Resources, which came into effect on January 1 of this year. The goal of the law is to “improve China’s energy structure, diversify energy supplies, safeguard energy security, protect the environment, and realize the sustainable development of the economy and society.”
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