China's electricity price sample is more embarrass

2022-05-26
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Editor's note: in China, which is in the process of rapid industrialization and system transition, electricity price is a prominent example of being regulated by administrative forces. The long-term undervaluation of electricity price has reduced the power consumption cost of the whole national economy, led to the extraordinary growth of demand, especially encouraged high energy consumption, high emission and major waste. The longer the administrative monopoly, the greater the strength of vested interest groups and the greater the obstacles to reform

administrative price fixing either leads to shortage or low efficiency and serious waste. Artificially belittle the value of goods, either the supplier withdraws or the demander does not cherish it. In either case, it is destructive to the balanced operation of the market economy. The regulation of electricity prices by China's administrative agencies can be said to be a typical embodiment of this destruction

imagine how the protection of concrete pressure testing machine will be in the world if there is no electricity one day? Electricity is so important to modern civilization that it is characterized as "public utilities". However, whether it is the invention and initial application of electricity, or the current and future supply, it is the result of private behavior and market forces

since it is a market-oriented private behavior, all things naturally take price changes as the wind vane. The real market price is not only determined by the cost, but also depends on the relationship between supply and demand. For this reason, no matter what kind of "goodwill" consideration the administrative power takes to control the electricity price, in the end, it never fails to become a "bad result"

in China, which is in the process of rapid industrialization and system transition, electricity price is a prominent example of the automatic interruption and automatic calibration function of the power pipe moving beam to meet the needs of social products and environmental protection: the system can automatically complete the calibration process of indication accuracy and complete the function: the experimental process, measurement and display are all completed by the single chip microcomputer. The long-term undervaluation of electricity price has reduced the power consumption cost of the whole national economy, led to the extraordinary growth of demand, especially encouraged high energy consumption, high emission and major waste. The longer the administrative monopoly, the greater the strength of vested interest groups and the greater the obstacles to reform. The power sector has therefore been criticized by public opinion for many years. In particular, it is difficult for a large number of high-efficiency private capital to enter the power production, transmission and transformation industry. The power facilities under the state-owned monopoly not only have low operation efficiency, but also have serious quality problems. This was fully exposed in the snow disaster in early spring this year

what is more problematic is that due to the low concentration of China's coal industry and the efforts of market-oriented reform over the years, the administrative regulation of coal "price limit" can only be on paper. Therefore, it is found that although the government's "price limit" document has been released at least twice this year, the actual situation is that "planned coal" has no "plan" at all, and the extremely low contract performance rate makes it useless; Money can not buy coal, power plant purchasers run all over the world, and it is difficult to reverse the fate of frequent emergency and shutdown of power plants; Reduction of coal supply; "Coal traders" are active, but they are a group of middlemen who bid according to the market conditions and have contacts, so they can bypass the "administrative price" to find coal

administrative price fixing either leads to shortage or low efficiency and serious waste. The artificial devaluation of commodities is either the withdrawal of suppliers or the neglect of demanders. In either case, it is destructive to the balanced operation of the market economy. The regulation of electricity prices by China's administrative agencies can be said to be a typical embodiment of this destruction

in fact, any form of price control is only wishful thinking and cannot succeed. This truth has already penetrated into the hearts of the people and has become an economic common sense. However, it is puzzling that in the public opinion against price control, why are the administrative agencies always enthusiastic about "price limit" and can form public decision-making? I'm afraid this needs to be taken seriously and analyzed. In my opinion, the main reasons are as follows:

first, government agencies still fail to straighten out their relationship with the market. Putting the administrative power above the market, even if it can not be defined as the traditional "paternalism" -- naturally, it is also a paternalistic authoritarian consciousness to think that it can intervene, care about and intervene in everything regardless of the situation

Second, the decision-making process of public policy still lacks clear authorization and effective supervision, which highlights the serious lag of government institutional reform. Although there has been a "hearing" on matters such as price adjustment, it is still a mere formality and is far from the due decision-making mechanism of public policy. Moreover, price adjustment is not a matter for administrative agencies at all

Third, the existence of an administrative organization specializing in price management. From the central to the local level, the existence of this administrative organization is the biggest obstacle to the market-oriented reform of the price mechanism

Fourth, the existence of highly state-owned monopoly industries not only provides administrative excuses and convenience for price regulation, but also the most powerful support force

under the high state-owned monopoly, no matter what kind of industries and enterprises, they are essentially the same administrative sequence, and government institutions and state-owned enterprises are also the main suppliers of products. Since it is the main body, it naturally has the right to price and adjust the price of products - price control. In this regard, the administrative organ is justifiable. It seems that if it is not, it is dereliction of duty. The state-owned monopoly industries and enterprises controlled by vested interest groups also proceed entirely from the interests of individuals and small groups. When necessary, they strongly demand and support price control, especially the price control of inputs, in order to reduce costs, cover up the incompetence and low efficiency of operation and management, or ensure vested interests. This kind of influence and pressure from interest groups must not be ignored in the process of administrative policy introduction

Fifth, the substantial increase of the government's financial strength, especially the financial expenditure decisions that are not subject to social constraints and supervision, provides a material basis for the government to implement price control at will. Because the arbitrary use of financial subsidy tools has become a supporting force for the implementation of price control

however, we do not know that as long as it is a market economy, the government is only a pick-up of the market. How can the caretaker be superior to the owner? "Macro-control" is just the government's self-discipline and regulation of its own behavior. Most importantly, as the main body of modern credit currency issuance right and fiscal revenue and expenditure, the government should focus on fiscal policy and monetary policy as tools to increase or decrease the economic behavior of central and local governments at all levels, so as to affect the behavior of private market. Other tasks are completed in accordance with the law to supervise the legitimacy of the behavior of market subjects. As for price, because it is the result of free exchange in the market, it is not a matter of government management. Otherwise, as people can see, the more the administrative power of the government is mixed and wants to dominate, the more it will lead to the distortion of the price mechanism and the more trouble it will be. It can only be a vicious circle of "reason and chaos"

therefore, if people do not want to fall into the panic of lack of electricity or lack of electricity, they should form a stronger social force, more quickly and effectively promote the reform of state-owned monopoly industries and enterprises, focus on breaking administrative monopoly and liberalizing various restrictions on local private capital; Urge the establishment of public participation in government fiscal revenue and expenditure decision-making and the reform of the supervision system to curb the randomness of fiscal revenue and expenditure; While strengthening the supervision of the legitimacy of the behavior of market subjects, consider abolishing those administrative institutions specializing in price management. Perhaps only in this process can we speed up the marketization of the price mechanism and reduce or even eliminate price regulation

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