Overview
- On December 29, 2002, the former State Power Corporation of China was divided up to become the “Big 5”: Huaneng, Huadian, China Power Investment, Datang, and Guodian.
- The Big 5 are state-owned enterprises under the direct supervision of the CPC Central Committee, with assets controlled by the State-Owned Assets Supervision and Administration Commission (SASAC).
- The Big 5 received as much as RMB10 billion in subsidies to tide them over their record 2008 losses, which stemmed primarily from their inability to cover steep coal costs combined with the government’s set low electricity prices.
- Each year, China's coal producers and power companies sit down to negotiate the following year's contract coal prices, which have long been a bone of contention. Negotiations for 2009 coal prices resulted in a deadlock, as domestic coal miners aimed to charge power producers 10 percent more for fuel under the 2009 annual contracts, while power producers wanted a price cut of as much as 10 percent.
- In order to be less vulnerable to domestic coal prices and less dependent on domestic coal miners in the future, the Big 5 have stepped into the domestic coal-mining industry and have also started purchasing more coal from abroad (even with transportation costs, foreign coal can be cheaper).
