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China Releases Reforms on Plans to Charge Higher Prices on Commodities

China Releases Reforms on Plans to Charge Higher Prices on CommoditiesChina is rolling out reforms with wider reach in how they will price its water by the end of the year. The government plans to charge higher prices to the heaviest urban consumers to help conserve sources and kick start several investments.

The planned changes is part of a larger government reform on its current State controlled pricing structures on several things ranging from water, natural gas and electricity that are flawed. Some say that under pricing resources have help the government in protecting their citizens and industries from inflation. But overuse is now the result of low costs that is contributing to the environmental woes of China and its long term concerns on ht economic sustainability. China’s top economic planning body the National Development and Reform Commission announced a plan that made the first stab on the actual resource sector reform once the economic reform blueprint created by the top leaders of China will target the cheap use of resources and has promised to give a greater roles for markets in creating and setting prices for power and its other commodities.

The new pricing system will be put into use in 2015 and will extend current trials in some places which include the three tiered pricing structure that will be based on water use for households in all cities and towns. Based on the new plan the heaviest consumers and the top5 percent of households will be paying three times the current base rate. Second tier households will pay 1.5 times the rate and the lowest rate or 80 percent of urban households will not be affect by the changes.



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