| Energy is an important material foundation in developing national economy and improving living standards. As an essential part of the energy industry, the electric power industry has become a major indicator for the economic and social development of a country or region.In its seventh Five-Year Plan, China made the important strategic decision to "place electric power in the center of the development of energy industry". In the short period between 1978 (when the policy of reform and opening up was adopted) and 1997, the development of the electric power industry terminated the shortage of electric power, which had continued for a quarter of a century since the 1970s, to reach a balance of supply and demand. The speed and scale of this change has not been common in any country.Nevertheless, it is necessary for us to see that, due to the special position of the electric power industry in China's national economy, its development has been accompanied by monopoly. In 1998, the former Ministry of Electric Power Industry gave way to the establishment of the State Power Corporation of China, which indicated the transition from the planned economy to the socialist market economy. In spite of this, the monopoly nature of the power industry has not been eliminated. Consequently, it has hindered the further development of the industry. On its entry to WTO, China has gradually opened up its power market and its power industry is now faced with more direct and severe challenges. The multinational power companies are taking up the Chinese market with their predominance in low cost and high quality, latest technology and modern management. In the mean time, as a member of the WTO, opening to the international market has also created opportunities for China's power industry.How will China's power industry take the challenges and grasp the opportunities? On the basis of the comparative advantage principle and other relevant economic theories, the rules of WTO and the conceptions of multinational companies and powerreform in other countries, the author analyzes and discusses the current situations and problems of China's power industry and makes suggestions on the strategies to take.Chapter One presents the current situations of China's power industry. It gives a detailed account of the development of the power industry in this country since 1949 (especially since 1978), covering such issues as the state investment structure, the productive capacity, and the changes in the consumption structures. It points out the achievements as well as the problems. Then it introduces the new model of reform adopted since December 2002, which is composed of the Electric Power Supervision Commission, the five major electricity generation companies and the two major electric network companies. This outlines the transition from the state administrative system under the planned economy to the corporate management system under the socialist market economy, and from the monopoly system to the market-oriented system of "separation of the network from the plant and competition of price under state supervision". Finally, problems of the industry are discussed, including monopoly and self-protection, inadequate legal system, irrational allocation, low concentration, weak overall competitive ability, poor technology, and the necessity to reform its financing channels.In Chapter Two, the challenges brought by the entry into WTO are analyzed. After a brief overview of the WTO and the process of China's entry, it discusses the challenges facing the country's electric power industry and, especially, the electric power equipment manufacturing industry. It then gives a detailed account of the entry into China's electric power industry by multinational companies. This is followed by an analysis of the potential ventures brought by the new round of reform aimed at opening the market and totally abolishing monopoly. Different models of electric power reform in the UK, USA, France and Japan are introduced, with the hope of providing experience... |
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