Reform of Chinaʹs electric power industry Challenges facing the government

Chinaʹs electrical power industry requires substantial reform if the countryʹs economic growth is to be sustained. The 1997 Electricity Law, the creation of a State Power Company and the abolition of the Ministry of Electric Power are important first steps on the path of reform, but it seems that a clear plan is lacking. Objectives of the reform should include increasing the capacity to deliver power, constraining the costs of the power industry, increasing end-user efficiency and minimising environmental damage. Efforts should be directed at restructuring the industry in such a way that fair competition may be introduced, at least in power generation, and at establishing a viable regulatory agency. Both tasks have the potential to be thwarted by a range of vested interests at different levels of government and industry.