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Title: Understanding the performance of the electric power industry in China
Authors: Liu, G
Zhang, L
Keywords: Electricity supply;Electric power industry;Plan price;China
Issue Date: 2012
Publisher: MIT Press
Citation: Asian Economic Papers, 11(2), 62 - 92, 2012
Abstract: Despite three decades of reform, China's electricity sector is still organized by a “new reformed plan” where capacity investment has been liberalized but prices and production remain controlled. This paper examines the impact of the current plan prices on end-users with reference to the OECD and how the plan price of electricity supply is formed. We argue that the plan price is set in an attempt to balance the interests of the public and the power industry. We find that China's industries do not pay a cheaper price for electricity than the West, and the plan price is formed through bargain between the firm and the state, which allows the firm to have a soft price constraint on its costs.
Description: © 2012 The Earth Institute at Columbia University and the Massachusetts Institute of Technology.
ISSN: 1535-3516
Appears in Collections:Economics and Finance
Dept of Economics and Finance Research Papers

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