China's first energy law came into effect on Wednesday, strengthening the legal basis for the energy sector, playing a role in ensuring national energy security, and promoting green and low-carbon transformation for the world's largest energy producer and consumer.
The Energy Law provides that China will continue to advance clean and low-carbon energy sector development by prioritizing the development and utilization of renewable energy, promoting clean and efficient utilization of fossil fuels, and improving the energy utilization efficiency.
The overarching national statute formally integrates hydrogen, previously classified as hazardous chemicals, into the energy management system.
"The Energy Law is the first Chinese national law to provide for hydrogen as a type of energy, clarifying its energy attribute and opening up chances to promote the development of the hydrogen energy business. The law also defines the legal significance of the Green Electricity Certificates and supports increased green electricity use throughout society," said Wan Jinsong, deputy head of the National Energy Administration.
The Green Electricity Certificates or GECs were piloted in 2017 to build a renewable electricity market-based mechanism in China.
GECs are the sole way to validate renewable energy production and consumption.
According to official figures, China had issued 3.55 billion GECs by October, 2024.
Wan said the Energy Law will promote the transformation of energy security.
"The Energy Law sets the order of importance for developing and using fossil fuels and renewable energy. It makes it clear that priority should be given to the development and utilization of renewable energy, and the ability to switch to non-fossil energy in a safe, reliable and orderly way should be improved," Wan said.
Experts said as the core and regulating law in the energy industry, the Energy Law has constructed the institutional system for green and low-carbon energy development.
"The enactment of the Energy Law signifies that China has a basically sound system for regulating energy. It already includes the Electricity Law, the Coal Law, the Renewable Energy Law, and the Energy Conservation Law, among other laws, rules, and administrative regulations," said Wang Peng, president of the National Institute of Energy Development Strategy, North China Electric Power University.
According to the experts, the Energy Law is more comprehensive than those separate laws, spelling out how different types of energy should be used and giving basic rules for making sure that the growth of all types of energy is coordinated.
China's first energy law takes effect, highlighting green, low-carbon development
Chinese stock markets dropped on Monday, as AI and tech stocks continued to see-saw, according to China Global Television Network (CGTN) market analyst Timothy Pope.
The benchmark Shanghai Composite Index closed down 0.59 percent at 3,882.01 points, with the Shenzhen Component Index, which has more exposure to the tech sector, closing 2.13 percent lower at 13,794.29 points.
Trading volumes on the two indices rose with around 2.01 trillion yuan (about 296.28 billion U.S. dollars) traded on Monday, up from 1.88 trillion yuan (about 280 billion U.S. dollars) last Friday.
Traditional sectors such as precious metals, coal mining, and insurance led the gains, while bio-tech stocks were among the top decliners.
The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, lost 3.21 percent to close at 3,431.89 points on Monday.
The STAR Composite Index, which tracks the performance of stocks on China's sci-tech innovation board, closed 3.10 percent lower on Monday at 1,896.16 points.
"The A-share markets seem locked in this cycle of rally and rout for those growth stocks, particularly in the AI and adjacent sectors. Today was very much on the rout side so, while the Shanghai Composite Index was down 0.6 percent, we saw the Shenzhen Component down more than 2 percent, the ChiNext board was down 3.2 percent and the STAR 50 down 3.1 percent. Those last three are more exposed to the tech rally than the Shanghai Composite. The big losers as I said were AI hardware companies - Shenzhen Gongjin Electronics was down 10 percent, Zhongji Innolight fell more than 7 percent. But they weren't alone because the other big winning sector of the last few weeks - biotech - was in retreat today as well. Investors were rotating into gold and coal stocks as well, and agricultural stocks extended the food security trade rally that we saw at the end of last week. There were a number of stocks across those sectors, all of those were hitting the upper limits of trade today," said Pope.
Pope said the rest of the week will be dominated by earnings reports from some of China’s biggest companies.
"The rest of the week is going to be mostly about earnings. The end-of-August filing deadline is fast approaching. Friday will be a really big day on the earnings calendar. We've got BYD, PetroChina, Shenhua Energy and a lot of big banks as well. Earnings that we are going to see for ICBC, China Merchants Bank and others will give us an insight into how much pressure the big banks are under with their margins. BYD is also going to be an interesting one in light of the government's anti-involution campaign and its efforts to avert a bit of a race to the bottom in the EV sector. And before we get there, there are Nvidia results in the US on Wednesday which will doubtless impact every stock in the AI space," he said.
Chinese stock markets start week lower on AI volatility: analyst
