Beijing to promote investment in power industry's price reforms

The head of China's power industry reform committee has vowed to preserve stability and hinted that the interests of private investors will be protected.

In the first official comments on electricity pricing since last weekend's landmark industry reform announcement, Li Yanmeng said Beijing would adopt a gradual approach in price reform.

The underlying principles were that the new pricing policy must encourage long-term investment and promote corporate efficiency enhancement.

'The profitability of power companies must be maintained to a certain degree when [we] devise [new] market rules, in order to attract investment,' he said.

The long-awaited comments, published on State Power Corp's Web site, were seen by analysts as an attempt to allay concerns of industry players and the investment community about the potential impact of pricing reform on their investment returns.

So far, few details on pricing issues of the sweeping industry reform have been unveiled, and analysts said Mr Li's comments still had not shed much light on issues investors were most concerned about, such as implementation schedule of power pooling and bidding.

Apparently seeking to divert the focus of market watchers from the likelihood of lower electricity tariffs, Mr Li said: 'The objective of pricing reform cannot be simply understood as tariff reduction.'