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<p><font face="Verdana">Some big cities in China are about to raise the price of water in their effort to conserve the precious natural resource. At a recent conference aimed at promoting the economic use of water in Beijing, Cheng Jing, head of the capital's water resources bureau, said the city would draw up its price-rise plan in the next two months.</font></p><p><font face="Verdana">Shanghai, Shenyang, capital of Liaoning province, and some other big cities, too, are planning to increase the price of water.</font></p><p><font face="Verdana">Since the water table in many Chinese cities is falling and water supply is dwindling, the authorities have good reason to raise the price. But just like for other public products, a purely administrative pricing regulation is not the answer to the problem. Instead, establishing a set of timely industrial pricing mechanisms could be the key to solving the problem and offering a way of reforming the long-ticklish pricing system for resources.</font></p><p><font face="Verdana">China's resources have been priced at a comparatively low level. This has not only become a hurdle for sustainable development of the national economy, but has also resulted in excessive waste of the country's precious resources. It has become one of the biggest stumbling blocks to the much-needed industrial transformation of the country.</font></p><p><font face="Verdana">China ranks 88th in the world in terms of per capita water volume, and has one-fourth of the global average, making it the 13th poorest country in water resources. The price of water in the country, which covers only the cost of water treatment, has long been lower than the actual cost. The price excludes the cost for sewage disposal and its value as a rare commodity that requires conservation. Thus despite a moderate price rise in recent years, the current price of water is still not enough to sustain normal operation and earn a reasonable profit for domestic supplying enterprises.</font></p><p><font face="Verdana">The low price of water has not helped consumers realize the importance of conservation, leading to the growing demand and resulting in further waste. This is the reason why the pricing leverage has failed to play out its full role in the distribution of the country's water resources. In 2007, the country used 131 cu m of water to produce 10,000 yuan ($1,465) worth of industrial goods, three times higher than the global average. This is even after the cost declined a little from previous years.</font></p><font face="Verdana"><p><br/>All this makes it all the important for the government to reform the water pricing system. State departments and officials no longer differ over a price increase. But how to prevent too great an impact on the national economy remains a big question, especially because the demand for water is rising. That's why we need more specific guidelines and regulations for better implementation of policies.</p><p>The main difficulty in having a comprehensive water pricing mechanism is because the public doubts the claims of the country's monopolistic water supplying enterprises on the real cost of treating and supplying water. Since there is no competitive market mechanism in place, it is possible that ill-performing monopolistic water supplying enterprises try to raise their operational cost or try to shift the mismanagement cost to end users. It is difficult for outside agencies to monitor such unscrupulous acts. That best explains why confrontations between suppliers and consumers are common at public hearings on pricing reform of resources, and administrative departments have to reach compromise formulas. That in turn shows the strengthened administrative pricing model is to blame for the existing pricing system's failure.</p><p>Experiences of foreign countries show that a gradual introduction of a non-governmental operation mechanism in China's resources distribution could be a workable solution for the country's bad-performing market system.</p><p>In the late 1970s, some Western countries started a campaign to privatize public utilities. Margaret Thatcher, then British prime minister, was the first to do so, and the trend soon spread to many other Western countries. The policy was aimed at letting more private enterprises compete for supplying public products in order to make the pricing mechanism play its self-regulatory role.</p><p>The logic behind the campaign was that administrative departments are not the only ones that can supply public products and that all enterprises, public and private, should be able to do so if public opinion approves of it. The idea was based on the fact that scientific bidding, hearing and negotiations would help private enterprises play their full role in promoting market competition and maintaining low prices for public products. But in the long run, that did not happen in many cases.</p><p>The price of water has to be raised in China. But we still need extensive discussions and more data before deciding how and by how much it should be raised.</p><p>Resource suppliers have the right to demand that their prices need to be raised. But government departments have the right to push for a reasonable pricing mechanism, too. The public has the right to raise doubts over the reasons that necessitate an increase in price. A formal public hearing in no way is enough to help reach a compromise formula in such a case.</p><p>That's why the government needs to go ahead with a series of timely reforms in the field of public utilities.</p><p>The author is an anchorman with China Business Network, a TV network based in Shanghai</p><p>(China Daily)</p></font> |
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发表于 2009-5-28 21:22:00
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发表于 2009-6-4 15:59:00
