Renewed Efforts For Reform In The Power Sector

In an industry where local government control has dominated for decades, documents issued in October 2000 show that Chinese policy makers are making renewed efforts to push ahead with reform in the power sector. This reform aims to separate production assets from government administration. Reform of the power sector has moved slowly since the framework and timetable for change was first announced with the State Economic and Trade Commission, Relevant Questions Concerning Intensifying the Reform of the Power Industry System Opinion, on November 27 1998.

Goals

The main goals for the four-stage reform of the PRC power industry announced in December 1998 include:

a) separation of government administration from business functions;

b) corporatization of all existing provincial and regional power bureaux; and

c) separation of the distribution and production functions.

The final stage of reform includes the establishment of a competitive electricity market. The first decisive steps in structural reform, which took place in 1997-1998, abolished the former Ministry of Power Industry and established the State Power Corporation of China (SPCC). However, achieving separation of functions and commercialization of the power industry among provincial and local bureaucracies has proven difficult.