China is to raise the electricity price for companies with high
energy consumption in the coming three years in the hope of
restricting their development.
The National Development and Reform Commission (NDRC) announced
in Beijing Saturday that the electricity price would rise from the
present five cents to 20 cents for some of those companies in the
coming three years.
The price hike, to start from October 1, would be carried out in
three steps, with the other two on January 1 of 2007 and 2008
respectively.
The NDRC predicted that the price hike would raise the cost of
concerned companies by more than 5 percent every year and force
most of them out of the market in three years.
In order to avoid blind growth of industries with high energy
consumption, the NDRC adopted different electricity prices for six
industries of electrolytic aluminum, ferroalloy, calcium carbide,
caustic soda, cement and steel in 2004.
By last May, 30 provinces, autonomous regions and municipalities
in China besides Tibet had adopted the policy.
But as the difference is not so big and local governments have
strong incentives to boost the local economy, the policies did not
work well.
(Xinhua News Agency October 1, 2006)