ABSTRACT

Electricity powers modern society. It lights buildings and streets, runs computers and telephones, drives trains and subways, and operates all kinds of motors and machines. Reforming the power industry in China has been part of the process of general transformation from central planning to a market economy. The transition state faces additional challenges compared with the state in traditional market economies with mature civic societies and well-functioning institutions. In China, reforms began with a series of policy modifications. Responding to these policy shifts and consequently the creation of new incentives, individual economic and political entrepreneurs changed their behaviour accordingly. The reform experience in China's power industry shows that the state has played the central role in changing the direction of the development of the power industry. The chapter also presents an overview on the key concepts discussed in this book.