A Bright Light On China's Reform Agenda – Matthews Asia

A Bright Light On China’s Reform Agenda by Ryan Rutkowski, Matthews Asia

It is easy to get lost in the daily analysis of China’s economy and lose sight of some of the less glamorous long-term reforms underway. The electric power sector is one of these areas.

Last November, for the first time in more than a decade, China announced a plan to overhaul its power system. The comprehensive plan calls for a change in the pricing and structure of electric power. In the current system, the government sets a quota and price for power purchased by power generators and sold via the grid to consumers. This system of fixed prices has created problems in the past. For example, when...