Preventing Tacit Collusion in Chinese Electricity Reform

This paper analyzes on how to prevent tacit collusion which may happen in the process of China electricity reform. By summarizing 3 sorts of factors on tacit collusion, and combining the theoretical frame with characters of electricity industry, the author concludes that there is a field facilitating bidders´ tacit collusion in Chinese electricity generation, and market de-concentration, regulatory constraint, threat of entry and bilateral market are four basic measures for Chinese regulator to control market power, while the bilateral market is the most important measure to be considered.