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Abstract
The Chinese leadership in November 2013 determined to embark upon a new wave of
comprehensive reforms in China. This is clearly reflected by the key decision of the Third
Plenum of the 18th Central Committee of Communist Party of China to assign the market
a decisive role in allocating resources. To have the market to play that role, getting the
energy prices right is crucial because it sends clear signals to both producers and
consumers of energy. While the overall trend of China’s energy pricing reform since 1984
has been moving away from the pricing completely set by the central government in the
centrally planned economy towards a more market-oriented pricing mechanism, the pace
and scale of the reform differ across energy types. This paper discusses the evolution of
price reforms for coal, petroleum products, natural gas and electricity in China, provides
some analysis of these energy price reforms, and suggests few areas of reforms could
take place in order to have the market to play a decisive role in allocating resources and
to help China’s transition to a low-carbon economy.