The allocation and transportation of Shanxi coal in China: a simulation

Abstract

China has been undergoing a transition from a centrally planned economy to a market economy. While markets for some commodities such as coal have been established, the operation of the major national transportation systems is still under the central control. This special situation has its spatial impacts. The current paper examines such spatial impacts by simulating the varying potential market areas for the coal from the province of Shanxi, the largest coal-mining area in China, under different production and transportation conditions. The paper starts with an introduction of how a state-monopoly coal allocation-transportation system in China is changing into a combination of a price-oriented market with a centrally-operated transportation system. Then two network programming algorithms are employed to simulate the conventional allocation-transportation system. This simulation provides the basic model for the flow pattern of Shanxi coal. A series of variations from this basic model are then attempted to show the spatial implications of different development policies for improving the production and transportation of Shanxi coal.