China's Performance on the Resource Governance Index
China received a "weak" score of 43, ranking 36th out of 58 countries. It scored particularly poorly on the Enabling Environment component.
(out of 58)
(out of 100)
|47||Institutional & Legal Setting||43|
|39||Safeguards & Quality Controls||46|
Institutional & Legal Setting (Rank: 47th/58, Score: 43/100) learn more
China's "weak" score of 43 is the product of a convoluted legal framework and a marked lack of public information.
China's Constitution does not specify which authority is in charge of resource governance; both the Ministry of Land and Resources (MLR) and the National Development and Reform Commission (NDRC) grant mining licenses and publish bidding information on their websites.
The licensing process is ostensibly competitive, but state-owned companies are given a share in all oil projects. In the coal industry, unlicensed mines frequently operate with the consent of corrupt officials. The government generally receives royalties and taxes from extractive companies, but gaps in the legal framework allow companies to negotiate to have their royalty payments reduced or even waived.
There is no legal requirement that resource companies produce environmental impact assessments. The State Council issued an executive decree in 2007 on government openness and transparency, but its implementation still leaves much to be desired.
Reporting Practices (Rank: 30th/58, Score: 46/100) learn more
China received a "weak" score of 46, reflecting a lack of transparency regarding contract terms, revenue streams, and resource-funded subsidies.
There is little information available on the licensing process. The MLR advertises mines open to bidding and provides guidelines for the transfer of rights. It publishes winning bids, but not contracts. The government does not disclose how much money the MLR and NDRC receive or how the central and local governments share extractive revenues.
A variety of government agencies, including the MLR, the National Bureau of Statistics, and the Finance Ministry, publish resource data, but the information is often provided only in aggregated form. The Finance Ministry publishes disaggregated figures for special taxes; the MLR publishes information on reserves, production volumes, and estimates of investment in exploration and development, but provides no data on revenues.
Safeguards & Quality Controls (Rank: 39th/58, Score: 46/100) learn more
China's "weak" score of 46 is the product of a lack of effective oversight and the poor quality of government reports.
The legislature has no oversight role in the extractive sector and there are no procedures for appealing licensing decisions. The 2007 decree on government openness contains provisions that can exempt government officials from disclosing their financial interests in the industries they oversee. The National Audit Office reviews the accounts of state-owned companies and submits reports to the National People's Congress, but it is not clear that the legislature thoroughly reviews audited statements of resource revenues.
Enabling Environment (Rank: 31st/58, Score: 36/100) learn more
China received a "failing" grade of 36. While scoring relatively high on government effectiveness, China has low levels of democratic accountability and opaque budgets.
State-Owned Companies (Rank: 11th/45, Score: 82/100) learn more
The China National Petroleum Company and China National Offshore Oil Company are majority government-owned and dominate the petroleum sector. The coal sector is significantly more decentralized.
As publicly listed companies in China, Hong Kong and the United States, both companies must follow international auditing standards in their accounting and have independent auditors review their performance. The companies publish information on reserves, production volumes, prices, resource export values, estimates of investment in exploration, production costs, subsidiary companies, quasi-fiscal activities, production stream values, royalties, and dividends. The National Audit Office supervises the companies and publishes their audited reports.
Subnational Transfers (Rank: 25th/30, Score: 33/100) learn more
The central government transfers a percentage of resource tax revenues to provincial authorities. However, rules for revenue sharing are not published and reporting practices vary among provincial governments.
INSTITUTIONAL & LEGAL SETTING
SAFEGUARDS & QUALITY CONTROLS
To explore all data and compare country scores, use the RGI Data Tool.
Key Economic Indicators
|GDP (constant 2011 international $ billion)||1,529.8||2,555.8||7,318.5|
|GDP per capita, PPP (constant 2005 international $)||2,667||4,115||7,418|
|Extractive exports (% total exports)||5||4||3|
|Source: World Bank.|