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Fiscal Policy Case Study

Case Title:

Power Sector Reform in China: Progress and Constraints

Publication Year : 2010

Authors: S Chaudhuri and A Ghosh

Industry: Utilities


Case Code: FCP0018IRC

Teaching Note: Not Available

Structured Assignment: Not Available

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The Chinese power sector was characterised by unified and integrated government ownership. Moreover, independent accounting procedures for transmission and distribution of power and presence of inappropriate pricing policies had undergone years of reform since 1986. The Chinese electricity reform was able to offer continued momentum for the development of the power industry. Initially, the reform received success in combining economic reforms with social welfare. However, transparency, better law enforcement and less restrictive regulation in the sector still remained areas of concern. Apart from these, the power shortages arising due to the closure of coal mines on grounds of pollution, stringent government control and high demand resulting from high economic growth had added to the misery of the sector. Thus the performance of the Chinese power sector depended on how the sector installs a comprehensive and integrated set of policies and reforms in future.

Pedagogical Objectives:

  • To discuss the dynamics of power sector in China
  • To discuss the growth of Chinese power during the first two phases of reform
  • To analyse the performance of the Chinese power sector after China's inclusion into the World Trade Organisation.
  • To discuss the challenges that the sector faces in future.

Keywords :  Chinese power sector, WTO (World Trade Organisation), Power generation, Power transmission, Power distribution, Decentralisation, Electric Law, State Power Corporation, The State Economic & Trade Commission, National Development & Reform Council, Transparency, International Energy Agency, Restructuring of power sector

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