Reform of China’s energy sector: slow progress to an uncertain goal

High and sustained rates of economic growth have placed great strain on China's energy industries. For the first time the nation has become a net importer of energy, principally in the field of oil, and the supply of electrical power falls far short of demand. Reforms which have led to improved productivity in other sectors of the economy have not been applied with rigour to the energy industries.  The energy sector remains largely in state hands, the major state enterprises act as both operator and regulator, and entry barriers are high. The one profound reform which has been implemented is the raising of the price of most forms of energy.

The few available measures of technical and productive efficiency suggest that improvements have been modest. The profitability of the coal and upstream oil industries has risen dramatically in recent years, though this may be due mainly to the higher energy prices. At the same time the financial performance of the power and refining industries has deteriorated.

If the government persists in delaying reforms to the energy sector, it runs the risk that either the sector is unable to meet the challenges it faces or that considerable financial support will be required.


by C P Andrews-Speed, 1997, 26pp plus tables

Price : £25 (UK pounds), ISBN 1 900297 06 X

CEPMLP Information Service Ref: DP15

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