Move to end any price-fixing of utilities
THE NATIONAL DEVELOPMENT and Reform Commission, China’s top economic planner, said on Tuesday it will carry out targeted supervision of water, electricity, heating and telecommunication charges across the country starting from Nov 1. Beijing Youth Daily commented on Wednesday:
The top economic planner’s decision to step up supervision on a number of utility charges is an example of improved governance.
China has cut administrative fees on businesses by more than 420 billion yuan ($63.38 billion) during the past five years, from reducing operation service fees and power use costs to exemptions of highway tolls.
Similar attempts made nationwide to regulate the prices of fundamental services have made progress in correcting overcharges and relieving citizens of unreasonable fees, but not enough. Most water and heating suppliers are run by local governments, and the inspections on their service charges are basically conducted by local price watchdogs, who may be tempted to go easy on these State-owned enterprises.
In many cases, the transaction records of such State-owned enterprises are held by their city-level legal entities or above, meaning that pricing bureaus at lower levels will struggle to get the information and conduct thorough investigations. The absence of third-party, nongovernmental evaluations, too, puts a big question mark on the supervision by price watchdogs.
It is hoped, therefore, that the upcoming nationwide supervision will overcome existing flaws and keep the charges of everyday services at reasonable levels.
On the one hand, the inspection, designed by the NDRC and carried out by provincial pricing authorities, requires full support from and seamless communication with local governments. On the other hand, local authorities should take the inspection as an opportunity to improve their work.
In particular, extra efforts are needed to get rid of supervisory flaws as well as behind-the-scene nepotism. A third-party evaluation system should also be introduced to keep at bay misconduct by local inspectors.