Price Reforms Pushed as Government Aims to Liberalize Prices
The local government is pushing ahead with price reforms of necessities such as oil, water, gas, transportation and electricity. Basically the government is aiming to liberalize the prices in competitive sectors by 2017 as the government is considering proposals in reforming a wide range of State dominated sectors with scrutiny over mounting rigid pricing mechanisms that the government is using to regulate oil and gas markets.
The urgent fix is needed especially in the natural gas market as flagging demand is slowly threatening the country’s push in using more natural gas in hopes to lower emissions and fight of pollution. The government also promised to start new pilot schemes in letting power generators and users to decide the prices themselves and will expose more power plants to more market forces. Water prices will also be market driven in order to prevent waste since there is a shortage of supply.
Policymakers are responsible in choosing the appropriate time for liberalizing fuel prices and will continue to implement the lowest price policy for rice and wheat. Price reform moved swiftly in the recent years and price controls in telecommunications, transportation and medicine are relaxed. Last month in a State Council executive meeting have decided to reduce the number of categories of items that have government set prices from thirteen down to seven, which bring the number of items subjected to price restrictions down from a hundred to twenty.