2021 Volume 2021 Issue 1 Pages 1-7
As the world’s largest producer and consumer of coal, understanding the relationship between Chinese domestic coal and international energy prices is important for China to formulate policies to stabilize the domestic coal price. Therefore, the dynamic relationship between Chinese domestic coal and international fossil fuel markets during 2000–2020 is analyzed in this study. We found that the relationship between Chinese coal price and international coal, natural gas, and crude oil prices have different trends before and after 2008. We also found that the Chinese domestic coal price is only cointegrated with the prices of international natural gas prices after 2018. These results indicate that the dynamic relationships between Chinese domestic coal and international fossil fuel markets are changing within the investigated period. Natural gas is one of the major energy sources following the 13th Five-Year Plan of China. The stakeholders and policymakers of the Chinese coal market must consider the impact of international natural gas prices for identifying Chinese coal price movements in order to generate more accurate expectations.
