As the leading entity in the power industry, the State Grid Corporation has long held a dominant position within the domestic energy sector. However, as reforms continue to progress, some regions have begun to challenge this status quo by introducing private capital into the power market, leveraging their unique advantages. This shift marks a significant turning point, signaling the beginning of a more competitive and dynamic power industry that could break the traditional state monopoly.
One notable example is the power reform model implemented in Linghai, Liaoning, which initially drew considerable attention due to its perceived success. However, upon closer examination, it becomes clear that this model is not a true reflection of meaningful reform. Instead, it has led to the emergence of a new form of monopoly, one that is even more entrenched and difficult to challenge. The introduction of private capital did not dismantle existing monopolies; rather, it created a different kind of control, where local power entities now hold disproportionate influence over the market.
If public investment in the power sector results in such outcomes, it raises serious concerns about the real benefits of reform. In many cases, the so-called changes appear to be superficial—merely swapping one form of control for another without addressing the underlying issues. This can lead to a situation where the people suffer the most, as new monopolistic forces exploit their positions to the detriment of consumers.
The initial efforts of the local Rural Electricity Bureau in Linghai did yield some positive results, such as lower electricity prices, which demonstrated the potential need for reform. But true reform requires sustained innovation and bold policy changes, not just temporary fixes. Unfortunately, the so-called power reforms in Linghai have failed to deliver any lasting improvements or a replicable model for others to follow.
Instead, they have reinforced a system that resembles the old state monopoly but with a different face. The power company remains unaccountable, and the structure of the industry has not fundamentally changed. This suggests that what was once called a "reform" is, in reality, just a new variation of the same old system.
Electricity is a vital national infrastructure, deeply intertwined with people’s daily lives. It is essential that reform efforts are genuine and aimed at improving service quality, increasing competition, and ensuring fair pricing. While the introduction of private capital is a necessary step toward building a more competitive market, it must be done carefully to avoid creating new monopolies that serve only a select few.
China’s power industry is still in the early stages of developing a true market mechanism. Market-driven systems are widely recognized as the most effective way to promote economic growth and efficiency. However, the current lack of a mature market structure means that reforms must be approached with caution. Simply replacing state-owned assets with private ones does not guarantee better outcomes if the underlying structures remain unchanged.
Beyond Linghai, the coexistence of two power systems in Weiqiao, Shandong—where local power companies offer cheaper rates than the national grid—has also sparked discussions about the future of power reform. This "dual mode" highlights the challenges of balancing regional interests with national policies. While it offers tangible benefits to consumers, it also reflects the ongoing struggles between different power entities.
The experiences of Linghai and Weiqiao illustrate the complexities involved in reforming the national power industry. These local initiatives have brought attention to the need for systemic change and have highlighted the obstacles that must be overcome. Whether through incremental steps or bold transformations, the ultimate goal of power reform should always be to benefit the country and its people—not to create new forms of monopoly or control.
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