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Full Text: China's Energy Conditions and Policies
2008/1/9 11:48:16
-- Improving the emergency response system. As an important aspect of economic security, energy security has a direct bearing on national security and social stability. China practices unified power dispatch, hierarchical power management and operation of power grids by regions. A safety responsibility system with division of work among government departments, supervision organs and power enterprises has been established, in which the power grids and power generation enterprises work out emergency response plans to cope with large-scale emergencies. Following the principle of unified planning and step-by-step implementation, China has built national oil reserve bases and expanded its oil reserve capacity. It has gradually established a guarantee system for oil and natural gas supply emergencies to ensure secure supplies of energy.

-- Accelerating market system construction. China sticks to the policy of reform and opening-up, gives full play to the basic role of the market in allocating resources, encourages the entrance of entities of various ownerships into the energy field, and actively facilitates market-oriented reform related to energy. It has improved the coal market system in an all-round manner, established an open, orderly and healthy power market system characterized by separating government functions from those of enterprises and fair competition, paced up reform of the oil and natural gas circulation system, and promoted the healthy and orderly development of the energy market.

-- Deepening reform of management system. China has stepped up efforts in the reform of its energy management system, improved the national energy management system and decision-making mechanism, strengthened unified planning and coordination among state departments and local governments, and consolidated the state''s overall planning and macro-control in the field of energy development, with the focus on changing functions, straightening out relations, optimizing the setup and raising efficiency, so as to form a management system that centralizes control to an appropriate degree, divides work in a rational way, fosters scientific decision-making, and ensures smooth enforcement and effective oversight. The Chinese government has furthered the transformation of government functions, giving priority to guidance by policy measures and attaching importance to information services. It has deepened the reform of the energy investment system, and established and improved the investment regulation and control system. It has further strengthened standardized management of energy resources, improved the management system of mineral resources development and exploitation, put in place and improved the system for paid use of mineral resources and the system of trade in mining rights, and rectified and regulated the order of mineral resources exploitation market.

-- Advancing price mechanism reform. The price mechanism is the core of the market mechanism. On the premise of properly handling the relations among various interest groups and taking full account of the acceptability of all social sectors, the Chinese government has advanced energy price reform in a vigorous yet steady way, gradually established a pricing mechanism that is able to reflect resource scarcities, changes in market supply and demand, and environmental costs. It has deepened coal price reform to realize all-round marketization. It has propelled electricity tariff reform to ensure that electricity generation and selling prices are eventually formed by market competition, with the electricity transmission and distribution prices being supervised and controlled by the state. It has improved step by step the oil and natural gas pricing mechanism to timely reflect changes in international market prices and domestic market supply and demand.

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