The installed capacity of thermal power plants in China was 1,144 GW at end-2018, representing 60.2% of the country’s total capacity, having increased by 3% y/y. Both the share in total capacity and the y/y growth rate have been slowing down in recent years, in line with the country’s decarbonisation strategy and targets. In terms of investment in the Chinese electricity sector, the thermal sources recorded an 8.3% y/y decline in investment to RMB 78.6bn in 2018, from RMB 85.8bn in 2017. The ongoing replacement of thermal power by renewable energy in China can be gauged by the fact that in 2018, out of a total 128 GW newly added installed capacity in China’s electricity sector, 73% went to renewable energy capacity. The thermal electricity in China is almost entirely generated by coal-fired power plants.

China’s chemical fertiliser sector is highly competitive as a whole, due to severe overcapacity in some subsectors such as urea, phosphate fertilisers and potassium sulphur manufacturing. The key competition elements include independent innovation ability and high efficiency and safety. In the last few years, the Chinese government has encouraged domestic companies to invest abroad in order to gain expanded access to foreign markets via an international sales network.

China’s cement industry is characterised by relatively low concentration and severe overcapacity. In 2018, China had about 3,500 cement enterprises. However, restrictions on adding new cement capacity have recently pushed cement manufacturers to expand their production through M&As. The economic imbalance between the coastal and inland parts of China is the reason for the unequal performance of cement producers from different regions. Most of them are located in the regions of the Yangtze River Delta, the Pearl River Delta and Southwest China.