Inter-provincial joint venture better taps resource allocation

The recent news that several State-owned coal, electricity and investment companies from Shanxi and Jiangsu provinces will establish a joint venture has drawn wide attention and applause from China's coal-fired electric power community.

The equity agreement of the joint venture was signed on Monday, with a total equity capital of 6 billion yuan ($948.6 million). The planned venture will operate in coal, gas and electricity trade and investment, and will "buy in a bunch" coal-fired electricity generated in Shanxi province to "sell in a bunch" to Jiangsu province, according to its news release.

"Such a joint venture is a big step forward to coordinate inter-region resource allocation and optimize industry productiveness, underlining the nation's strategy on supply-side structural reform and coordinating regional development," said Ye Chun, deputy director with Department of Industrial Planning, Environment and Resource with China Electricity Council, which is the largest industry organization of China's electricity enterprises and institutions.