Review of “Is China's natural gas market globally connected?” Made by Khazova Natalia
This paper explores the evolving relationship between global natural gas markets and China's natural gas market in the context of the rise LNG and the need for clean energy transformation. By analyzing pricing relationships between China and global markets, the paper aims to provide insights for China to integrate with the global natural gas market and enhance its natural gas pricing system. The paper examines the impact of international natural gas market fluctuations on China's natural gas pricing system, which has become increasingly reliant on foreign imports due to energy transformation efforts. The study analyzes the risk volatility spillover effects between major global natural gas markets and categorizes them based on integration levels. It finds that the world's natural gas markets are not fully integrated, with distinct regional characteristics. China's natural gas market is not effectively aligned with international markets, leading to significant price deviations. While short-term price changes in China are influenced by European and Japanese market fluctuations, long-term trends are significantly affected by Japan, the US, and Europe. The study highlights the importance of considering regional and temporal differences in international natural gas price impacts on China's market and suggests reforms to enhance pricing mechanisms. The study highlights the need for China to align its natural gas market with global trends to ensure sustainable development. It identifies a time lag risk in China's market due to the lack of integration with international markets, leading to potential speculation and risks for industry enterprises. The study suggests using different prices for various gas sources, making frequent price adjustments, and creating a flexible pricing system to handle big price changes. These suggestions aim to prevent price reversals, quickly respond to global market shifts, and improve the stability of China's natural gas supply.
Reference:
Chai J. et al. Is China's natural gas market globally connected? //Energy Policy. – 2019. – Т. 132. –
