Reports

Hydrogen and carbon capture, utilisation, and storage (CCUS) are set to play important and complementary roles in meeting People’s Republic of China’s (hereafter, 'China') pledge to peak carbon dioxide emissions before 2030 and achieve carbon neutrality before 2060. Hydrogen could contribute to China’s energy system decarbonisation strategy, such as through the use as a fuel and feedstock in industrial processes; in fuel cell electric transport, and for the production of synthetic hydrocarbon fuels for shipping and aviation. The analysis of scenarios in this report suggests that while hydrogen from renewable power electrolysis could meet the majority of hydrogen demand by 2060, equipping existing hydrogen production facilities with CCUS could be a complementary strategy to reduce emissions and scale-up low-emission hydrogen supply. This report was produced in collaboration with the Administrative Centre for China’s Agenda 21 (ACCA21). It explores today’s hydrogen and CCUS status in China, and the potential evolution of hydrogen demand in various sectors of the Chinese economy through 2060, in light of scenarios developed independently by the IEA and the China Hydrogen Alliance. The report also provides a comparative assessment of the economic performance and life cycle emissions of different hydrogen production routes. Finally, the report discusses potential synergies and regional opportunities in deploying CCUS and hydrogen, and identifies financing mechanisms and supporting policies required to enable the deployment of hydrogen production with CCUS in China.

Air pollution is a global challenge to people’s health and has severe economic consequences. The region of Northeast Asia is no exception. Across most regions in Japan, and in the entire territories of Korea and China, annual average concentrations of fine particulate matter are above the guideline levels indicated by the World Health Organisation, indicating a risk to health. Policy action to tackle air pollution across the three countries, could prevent air pollution related illnesses and deaths, without affecting economic growth. This report presents projections for the impact of air pollution polices until 2050, with differing levels of regional coordination. Projections for current policies are compared with unilateral policy action, whereby each of the three countries introduce more stringent policies to tackle air pollution; alongside regionally coordinated policy action by all three countries; and policy action on a global level. The report presents the health, agricultural and economic impacts, and identifies considerable benefits from further coordination on air pollution policies, such as with regional and global policy action.

This annual publication compiles comparable tax revenue statistics for Australia, Bangladesh, Bhutan, Cambodia, People’s Republic of China, Cook Islands, Fiji, Indonesia, Japan, Kazakhstan, Korea, Kyrgyzstan, Lao People’s Democratic Republic, Malaysia, Maldives, Mongolia, Nauru, New Zealand, Pakistan, Papua New Guinea, Philippines, Samoa, Singapore, Solomon Islands, Thailand, Tokelau, Vanuatu and Viet Nam. It also provides information on non-tax revenues for selected economies. Based on the OECD Global Revenue Statistics database, the publication applies the OECD methodology to Asian and Pacific economies to enable comparison of tax levels and tax structures on a consistent basis, both among the economies of the region and with other economies worldwide. This edition includes a special feature on strengthening tax revenues in developing Asia. The publication is jointly produced by the OECD’s Centre for Tax Policy and Administration and the OECD Development Centre, in co-operation with the Asian Development Bank, the Pacific Island Tax Administrators Association and the Pacific Community.

Shenzhen is a stellar case of growth and economic transformation. Since its establishment as one of China’s first four Special Economic Zones in 1980, it has evolved at breakneck speed. Shenzhen transformed from a fishing village to a major world trade hub and is now home to global innovators in electronics. The Production Transformation Policy Review (PTPR) of Shenzhen, China reviews the city’s changing policy approaches, focusing on the shift from an assembly to a manufacturing centre and more recently to an innovation and start-up hub. Through a comprehensive assessment of Shenzhen’s experience, this review offers insights into the range of policies and strategies employed to stimulate industrial upgrading and learning in China. It provides lessons and actionable policy recommendations for the growth of cities and emerging economies in their catching-up journey. The PTPR of Shenzhen, China has been carried out in the framework of the OECD Initiative for Policy Dialogue on Global Value Chains, Production Transformation and Development and has benefitted from government-business dialogues and international peer learning (University of Seoul, Korea; University of Georgetown, USA and Digital India Foundation, India).

The impressive emergence of China’s economy is set to lose some momentum as the country catches up with more advanced economies and its rapid ageing also weighs on it. However, China can still reap the 'reform dividend', especially with measures to keep up the sustained growth of productivity. Reforms that enhance competition in product markets are among those that can potentially bring about significant productivity gains. China has been lowering the burden on start-ups and simplifying administrative procedures for a while already, achieving significant progress, though more procedures could go online and a one-stop shop is still to be implemented across the country. State ownership remains dominant in most network industries and there are many SOEs even in commercially-oriented industries such as retail or catering. SOEs enjoy implicit government guarantees and are the main beneficiaries of administrative monopolies, i.e. exclusive rights granted by regulations. In addition, they also benefit from various subsidies, sometimes leading to low-level, repetitious investment, excess capacity and waste of public money. A more level playing field would bring about efficiency-enhancing competition by private and foreign firms. Some network industries such as electricity and gas have recently accelerated their opening up and competition is developing in some segments. Digitalisation is a promising candidate to lift China’s long-term growth potential. Competition, in particular competitive pressure from foreign counterparts when there are few domestic players could be an important source of efficiency gains in digital services. China has been a frontrunner in business digitalisation for a while already, but the outbreak accelerated also the provision of e-government services. While strengthening of IPR protection and promoting innovative ways of financing are welcome steps to nurture innovative industries, generous tax exemptions – which by OECD standards do not constitute good tax policy - reduce the availability of public funds for other priority areas.

In the last 20 years, the People’s Republic of China (hereafter, 'China') has strengthened its position on the global stage as an energy innovator, as illustrated by the stories of solar power and, more recently, electric mobility. This is the result of several decades of increasing policy focus on technology innovation, which underpin China’s ambitions to become a producer of knowledge and foster innovation-driven socio-economic development. Looking forward, clean energy innovation will play a crucial role to achieve China’s objectives of carbon peaking by 2030 and neutrality by 2060, and ranks among core government priorities for the 14th Five-Year Plan period (2021-2025). This report builds on the IEA Energy Sector Roadmap to Carbon Neutrality in China chapter on 'Innovation for carbon neutrality', and provides complementary and new analysis and information. It maps the institutional and policy landscape of clean energy innovation in China and shows trends for selected metrics to track and explain progress of technology development.

The Economic Outlook for Southeast Asia, China and India is a regular publication on regional economic growth and development in Emerging Asia. It focuses on the economic conditions of Association of Southeast Asian Nations (ASEAN) members: Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam, as well as China and India. It comprises two main parts. The first part presents the regional economic monitor, depicting the economic outlook and macroeconomic challenges in the region. The second part consists of special thematic chapters addressing a major issue facing the region. The 2022 edition addresses financing sustainable recovery from the COVID-19 pandemic. The COVID-19 pandemic is proving to be extremely costly, both economically and socially and sustainable financing solutions are crucial for an equitable and inclusive recovery. The report explores how governments can obtain additional financing by harnessing bond markets, and use green, social and sustainability bonds to achieve policy objectives.

International grain prices experienced a sharp increase during the 2020/2021 marketing season, most likely due to the unprecedented increase of imported grains by China. What would be the possible impact on international grain markets if China remains a strong grain importer? The scenario developed to explore the impact of such a development shows that further increases in Chinese grain imports over the medium term could result in a 4% to 25% increase in agriculture commodity prices compared to what was projected in the OECD-FAO Agricultural Outlook 2021-2030.

This report looks at crucial elements of reforms to growth-friendly recurrent taxes on immovable property. Tax design practices in place in OECD and partner countries are compared and analysed through the lenses of economic theory and empirical analysis. A set of good principles and options for reforming recurrent taxes on immovable property based on the latest experience of property tax reforms around the world are presented that are particularly relevant to the Chinese context, where broader use of recurrent taxes on residential properties is needed to make local public finances more sustainable. Challenges and practices related to the administration of property taxes are explored as well as their interplay with different tax designs. In addition, the main political and administrative hurdles in approving and implementing property tax reforms are discussed, and the approaches commonly employed in successfully dealing with them are examined. Although there are major challenges in designing, reforming and managing a recurrent property tax system, it is possible to overcome these in a manner that allows society to reap benefits in terms of a better allocation of resources, more stable house prices and a fairer income distribution.

Energy service companies (ESCOs) deliver energy efficiency projects that are financed through the resulting energy cost savings. ESCOs can thus unlock energy efficiency action by addressing barriers related to funding and technical expertise. Despite their potential, many governments still struggle to stimulate development of a market for ESCOs. Evolving Energy Service Companies in People’s Republic of China, ('China' hereafter) provides an overview of how China has built the world’s largest and fastest growing ESCO market over the past decades. This report highlights how the government’s strategic measures to set up key agencies for ESCOs, engage the State-Owned Enterprises, and encourage market play by bringing in commercial players, in line with China’s socio-economic transition, have been critical to making the Chinese ESCO model a success. Looking ahead, ESCOs in China continue to evolve, for example by using digital technologies to make their businesses more sustainable and lucrative. Based on the insights gained from a survey of major ESCOs in China, the report highlights the challenges and opportunities of digitalisation and provides some policy insights.