Abstract
We examine why and how coal liquefaction, or coal-to-liquids, makes its case in China. Different from Europe and the United States, China is actively developing coal-to-liquids technologies and projects. Different from conventional wisdom that in China the central government mandates and guides coal liquefaction to ensure energy security, I argue that the diversification strategy of state-owned coal companies is another key driver for coal-liquefaction development in China, in addition to the state interest and policy that initiated this move. Given current extensive conversation and debate on Chinese technology innovation capability, my research sheds light on the innovation system in China and provides implications for technology policy and investments.
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