A supposed cure should not harm a patient, even if it does not work its magic. This is a basic doctrine of medicine. But economic planners on the mainland would also do well to keep this principle in mind. A case in point is the severe power shortage being experienced across the country. The sudden drop in power supply has been described as the worst since the opening up of the economy. At least 13 provinces have resorted to rationing electricity, including Guangdong. Many factors have contributed to the problem. The mainland depends primarily on coal for electricity generation. Severe weather has increased demand for heating and therefore electricity. The weather has also disrupted coal transport, further reducing an already strained supply. The closure of many smaller coal mines due to valid safety concerns has also affected supply. But controls imposed on the price of electricity are a key cause of the shortage. The market for coal has been completely liberalised as part of the mainland's free-market reforms. But long-standing state-controlled caps on power tariffs remain. The outcome has been that coal prices have soared, while those for electricity are capped. Some coal companies have been hoarding supplies. Coal-rich provinces such as Shanxi have been warned not to keep supplies to themselves, amid reports this is what they are doing. Some power companies have reportedly cut generation, with a few even selling their coal reserves because it is more profitable. The large, state-owned power companies will, undoubtedly, follow their price-cap directives. But even they will be under pressure to buy less coal. Similar market dislocations are likely to surface in other key sectors as a result of Beijing's price controls this month to counter inflation over a wide range of services and daily necessities. It was the first time such controls had been introduced in 15 years. Hopefully, they will only be in place temporarily. There are, after all, signs that inflation may ease later this year. Despite Beijing's announcement yesterday that the economy grew 11.4 per cent last year, slower growth is expected this year. This is because of a slowdown in China's major trading partner, the United States, and also an aggressive tightening policy over many months on the mainland. Policymakers in Beijing must, therefore, have the courage to allow market forces to help set prices and avoid market dislocations. This means moving away from the use of price controls as an instrument of state intervention. The way forward is to open up markets such as those for power utilities and transport. Their prices and charges could then find their equilibrium, instead of causing market dislocation. Beijing's concern about inflation is understandable. Inflation is a sensitive issue on the mainland. The central government is well aware that it can lead to social instability if not brought under control. Efforts to rein in inflation are needed, but price controls give rise to other problems, as the power shortage demonstrates. In the months leading up to the Olympic Games, Beijing's statesmanship and expertise will be seriously tested as it seeks to steer the economy safely through global market turbulence originating from the subprime mortgage meltdown in the US. It will try to engineer a soft landing - and hopefully succeed. But with every crisis comes an opportunity. It is time to open up more key sectors of the economy, moving away from increasingly obsolete methods of state planning such as price controls.