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Last updated at: (Beijing Time) Monday, December 30, 2002

Power Industry Sees Milestone Against Monopoly

China dismantled the State Power Corporation Sunday and set up 11 smaller companies in a move to end the corporation's monopoly of the power industry. The former State Power Corporation owned 46 percent of the country's electricity generation assets and 90 percent of the electricity supply assets.


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China put an end to the monopoly on the country's power industry on the last Sunday of 2002.

The State Power Corporation, which owned 46 percent of China's electricity generation assets and 90 percent of the electricity supply assets, was broken up into 11 smaller companies.

The smaller companies include two power grid operators, five electricity generation companies and four relevant business companies.

The five electricity generation companies each owns less than 20 percent of China's market. They will compete with each other for signing contracts with the power grid operators.

The birth time of these companies implied something. China's State Council approved the plan to restructure the power industry in March. According to a timetable, the new companies would be set up within the year.

The State Development Planning Commission (SDPC) said the country would also set up a regulatory commission which supervises market competition and issues licenses to operators.

Zeng Peiyan, minister in charge of the SDPC, said the government would develop a pricing mechanism for the power industry next year.

"It took us only 10 months to complete this huge job, which is rarely seen in other countries," said Zhang Guobao, vice-minister in charge of the State Development Planning Commission (SDPC).

China is the world's second largest electricity generation and consumption market, and the State Power Corporation was a giant with nearly 2 million employees. The price of its electricity affected the daily lives of most Chinese people.

The completion of restructuring the power industry is a milestone, according to Zeng Peiyan, minister in charge of the SDPC.

Over the past few years, China has made marked progress in its campaign against industrial monopoly. The breakup of China Telecom and the establishment of six civil aviation companies have leveled the ground for market competition in these industries.

This year, China also reshuffled the monopolized industries of tobacco and gold mining.

The restructuring of the power industry was the latest move by the Chinese government to accelerate the process of liberalizing the market.


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