Marketization of energy prices does not mean rising energy prices

“If we say that at the beginning of reform and opening up, China’s energy shortage was a shortage of production capacity and a shortage of investment capacity. In recent years, China’s energy shortage has not been due to the problem of China’s production and construction capacity, but a kind of 'price shortage'. It seems that the key to the development of China's energy industry and system reform will still be the reform of the price system."

Recently, the deputy director of the Institute of Finance and Trade of the Chinese Academy of Social Sciences and the energy expert Stan Researcher accepted an exclusive interview with this reporter.

China's energy shortage is a "price shortage"

Reporter: China's energy price reform has been in existence for many years. Please briefly introduce the general situation of China's current energy marketization.

Shi Dan: The price system is the first aspect of China's economic system reform. The reform of the energy industry system starts with the reform of the price system.

From the end of the 1990s to the present, the basic state of China's energy price system is that the prices of the upstream and middle links of energy production have basically been liberalized, while the prices of terminal links are still under the control of the government. By the beginning of the 21st century, with the gradual improvement of the market economy system, in addition to energy, China's other commodity prices have basically been liberalized. In contrast, the degree of marketization of energy prices is much lower than other sectors of the national economy.

Specifically, China's raw coal and crude oil prices have basically been market-based; the reform of refined oil prices has also been promoted. Now it can be said that it is a system that is connected with the market under government regulations. The government refers to market prices and international prices to price. In contrast, the market-oriented reform of electricity prices and natural gas price mechanisms is more urgent and the reform process needs to be accelerated.

Reporter: Under the current situation that international energy prices, especially oil prices, are generally rising, does China's control over energy prices have a certain positive effect in stabilizing international energy price fluctuations and alleviating inflationary pressures caused by rising international energy prices?

Stan: I think to some extent yes. As a basic product of energy, controlling the terminal price of energy products is conducive to controlling the price level.

However, simply controlling domestic energy prices does not eliminate the impact of international price increases. It merely temporarily traps this kind of impact within the industry. Taking oil prices as an example, the price of crude oil moves with the international market. If refined oil prices are not adjusted in due course, it will reduce refining profits. From this perspective, the implementation of regulations has sacrificed the interests of the oil industry to some extent. After all, the price fluctuation adjustment is not only an energy company, but also an adjustment signal to other industries.

In addition, in the 30 years of reform and opening up, the government has basically changed the prices of energy products and the basic environment in the initial period of reform and opening up. First, China has shifted from a planned economy to a market economy, and has established a framework of market economy. Market economy rules have become an economic The dominant rules of the operation; second, the company has become a relatively independent, self-managed, self-financing microeconomic entity. When the price mechanism interferes with the company's economic interests, the company's behavior will inevitably change and manifest itself in different forms. .

If we say that at the beginning of reform and opening up, China’s energy shortage was a shortage of productive capacity and a shortage of investment capacity. In recent years, China’s energy shortage was not due to the production capacity of China, but a “price shortage”. From this point of view, the key to China's energy industry development and system reform in the future is still the price system reform.

Reporter: The imperfect energy price system will inevitably affect all aspects of economic life. In your opinion, what are the negative impacts that it brings?

Shi Dan: From the actual situation, the negative impact of the lagging energy price system reform has shifted from the energy industry to the society.

For example, due to lagging electricity price reforms, the increased costs of rising coal prices cannot be transferred out. As a result, the economic efficiency of the thermal power industry is gradually reduced, and the return on assets is lower than the bank interest rate. The financial risk of the company is greatly increased. From the viewpoint of installed capacity and power generation, the five state-owned power generation enterprises account for about 50% of the total installed capacity and power generation. Once these enterprises cannot operate normally, the entire society’s electricity supply will not be guaranteed. Taking natural gas prices as an example, for a long time, natural gas prices in China have been guided by the government and the price level has been low. On the surface, the low price seems to be beneficial to consumers, but in fact it has caused the slow development of the natural gas industry in China, and more consumer demand has not been met, and ultimately affected the improvement of China's energy structure.

What is important is that the reform of the energy price system is lagging, which not only affects the coordinated development of the coal and power industries, but also causes unreasonable price-to-energy relations among energy varieties, and affects the application of new energy and new technologies and improves the efficiency of energy use.

Reporter: In connection with the “electricity shortage” phenomenon that has received much attention recently, has the energy price system not played an important role? What are the adverse effects of coal price instability?

Stan: I can say that. In view of the coal and electricity price mechanism, although the country has cancelled the price guidance for electric coal, due to the fact that the electricity price has not been liberalized, “market coal” and “planned electricity” have led to unfavorable prices in the upstream and downstream links of power production. This contradiction has affected In the normal trading of coal, some power plants have been affected because of high coal prices, enthusiasm for power generation, and normal coal inventories. In addition, in the process of coal price reform, coal transportation prices have not been considered in an overall plan. At present, there is a big gap between the price of pits and the factory price in China, and the transportation price is close to the price of coal pits. A considerable part of profits are transferred to circulation, and it is difficult for power plants to accept them. High coal prices, on the other hand, coal production companies have not received excessive profits. The relationship between the production price, transportation price, and consumer price of coal is not smooth, and the interests of coal companies, transportation companies, and coal users are distorted. The bottleneck of transportation has been an inevitable solution to the problem of coal prices.

Let the energy price mechanism be more transparent and market-oriented: According to the medium- and long-term scope, the reform of energy price marketization will eventually form an energy price that comprehensively reflects external costs such as market supply and demand, resource scarcity and environmental loss, and from the current perspective It is generally believed that the price of energy is relatively low compared to its intrinsic value. Does this mean that energy prices will enter a medium- and long-term rising channel?

Shi Dan: According to China's energy price changes over the past few years, China's energy prices are currently rising, the overall energy price level will continue to rise, and may continue to exceed the average increase in industrial products.

This round of energy price rise is affected by many factors: First, the impact of supply and demand, the acceleration of the development of heavy energy-intensive heavy chemical industry, energy demand has thus increased substantially, stimulating the rise in energy prices; Second, the rise in international oil prices This has led to domestic prices. Third, energy prices tend to be reasonable and resources are scarce. External costs of energy production and consumption have begun to be reflected in energy prices. As China has a large number of historical debts in this respect, resource taxes, environmental governance, and safe production inputs in the energy cost structure will continue to increase and increase.

It should be noted that full liberalization of energy prices does not necessarily lead to higher energy prices. One of the most obvious examples is that after the price of coal was released in 1995, the price quickly fell. Whether market-oriented reforms lead to rising energy prices are related to the shape of the energy industry. At present, the fields of water, oil, gas, and electricity are basically monopolized by the national giants or local large enterprises, and they lack adequate market competition. Government-led price reforms, if they do not change the way of cost pricing, tend to evolve into bargaining between enterprises and government price authorities. As a result, the cost of enterprises will increase, the price will increase, and the cost of enterprises will be passed on to consumers. It is difficult to extricate itself from the cycle of rising energy prices.

Correspondingly, on the one hand, the combination of taxation and fee reform and the complete integration of energy price costs, and on the other hand the combination of price reforms with the marketization and structural adjustment of the entire industry, makes the pricing mechanism more transparent and market-oriented. It can prevent the price reform from rising rigidly to a certain extent.

Reporter: How do you expect the energy prices to change during the 12th Five-Year Plan period?

Shi Dan: Although China's energy prices have risen by a certain margin in the past few years, it has not yet reached a reasonable level.

With the improvement of the degree of openness to the outside world and the deepening of China's market-oriented reforms, the government will gradually ease the control of energy prices, and energy prices will gradually return to the level determined by the relationship between supply and demand. The content of energy prices in the future will tend to be complete, and it should cover factors such as market supply and demand, scarcity of resources, and external costs of energy production and consumption. To some extent, it means that China's energy prices still have room to rise.

Focus on straightening out the relationship between the proportion of energy industry reporter: The call for accelerating energy price reform has been heard, but the actual progress is slow. What do you think is the main difficulty in promoting energy price reform?

Shi Dan: Price is an important way for the market mechanism to play its role, but the progress of China's energy resource product price reform has always lagged behind. Since the late 1990s, apart from coal prices, other energy price system reforms have been at the transitional stage of planned pricing and market pricing, and price reforms have been unresolved.

The difficulty in the reform of energy prices requires comprehensive consideration of macroeconomic stability and the people’s affordability, among other factors.

Second, even if it does not involve maintaining the macroeconomic stability, it also involves the interests of all parties. Now with the economic development, we have formed the main body of different interests. Different goals and different interests have made our energy price reforms difficult. It can be said that the main reason for the lagging energy price reform in China is that the energy price reform not only involves the interests of producers and consumers, but also involves various interest relationships between the central and local governments, central and local enterprises, and energy price reform is difficult. Pareto improvement.

Energy prices need to choose timings that have the least impact on the interests of all parties. However, energy prices cannot be regarded as macroeconomic control measures or energy prices are completely regarded as prices of public goods. Otherwise, energy price reform will be difficult to advance.

Reporter: From what aspects should energy price reform start?

Shi Dan: In the "Twelfth Five-Year Plan" proposal, it is proposed to deepen the reform of resource product prices and factor markets, rationalize the price relationship among coal, electricity, oil, gas, water, minerals and other resource products, and improve important goods and services. Factor price formation mechanism.

According to the problems existing in China's current energy price formation mechanism, the main objectives of the energy price system reform are to promote the effective use of energy resources and the development of renewable energy, and to straighten out the proportional relationship of the energy industry. Among them, the appropriate adjustment and liberalization of electricity prices is the focus and core of the entire energy price system reform.

Specifically, the government should gradually liberalize the control over refined oil and electricity prices, rationalize the price relationship between upstream and downstream energy production, and establish a comprehensive market price mechanism. We will adjust the price ratio between energy products and promote the optimization of China's energy structure.

To improve the composition of energy prices, fully reflect the relationship between energy supply and demand and the scarcity of energy resources and external costs of production and consumption.

The energy price system reform should be coordinated with the energy tax system reform. The energy tax system reform must be coordinated with the goals and directions of the energy price reform. We must appropriately increase the use tax on China's energy resources and levy an energy consumption tax to reflect the scarcity of energy resources and the principle of social equity.

To improve the cost accounting of energy products, it is necessary to extract environmental management and enterprise exit fees for energy products. We will promote the production and consumption of renewable energy and clean energy by reducing income tax and consumption subsidies.

In addition, market access to energy production and supply should be liberalized to the maximum so that companies can freely enter or exit energy production shortages or surpluses based on market signals.

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