Reform drive will encourage mixed-ownership model
Major State-controlled industries such as electric power and petroleum will be opened further in 2016 and reforms of State-owned enterprises (SOEs) are expected to deepen, officials said at a forum held in Beijing Sunday.
In the course of SOE reform, major industries including electricity, oil and gas, railways, aviation and telecommunication will be encouraged to participate in the mixed-ownership model in 2016, Lian Weiliang, deputy director of the National Development and Reform Commission, the country's top economic planner, told the forum.
Lian noted that competitive sectors such as electricity and oil will be further opened up to modernize the economic structure, domestic news portal ifeng.com reported Sunday.
However, an analyst who specializes in SOE reform questioned whether the reforms will actually offer more investment opportunities for private capital.
"The ongoing SOE reforms should focus more on establishing a modern corporate management structure and improving efficiency," Liang Jun, a research fellow at the Guangdong Academy of Social Sciences, told the Global Times Sunday.
Instead of just vague words about further opening up the electricity and oil industries, top planners should offer more precise ideas about how to improve corporate governance - for example, how to make board members accountable for every vote, Liang said.
He added that third-party supervision of SOEs is "indispensable."
Supervision of State-owned assets should be improved both internally and externally at SOEs to prevent the abuse of power and the erosion of State-owned assets, according to a post published by US-based consulting firm McKinsey & Co in September.
Lian said pricing reform will also be carried forward. According to Lian, the number of prices set by the central government has fallen by 80 percent since 2001 to 20 items.
In his speech on Sunday, Lian stressed pricing reforms for utilities such as natural gas, electricity and water.
He said that the base and incremental prices of natural gas for non-residential use will be merged.
The base price for commercial users of natural gas in China is set very low by the government, while incremental prices are market-linked and usually higher than the base price, according to Lin Boqiang, director of the Center for Energy Economics Research at Xiamen University. Once the discrepancy is eliminated, pricing will be more market-driven, Lin told the Global Times on Sunday.
He noted that prices for all types of fuel - coal, oil and natural gas - have become relatively more market-driven.
Lian also said that a tiered pricing model will be implemented in most regions of the country, and a similar model is being developed for water and natural gas.
Under this model, prices increase along with usage.
