The National Development and Reform Commission (NDRC) and the Ministry of
Construction issued a circular on Monday that allows heating prices
to fluctuate with coal prices, according to an NDRC source.
Despite China's general movement away from a planned economy to
a market economy, the prices of some resource products, still under
the monopoly by state-owned enterprises, including electricity,
water, oil and heating, are set by the government and do not
fluctuate according to market forces of demand and supply.
Up until now, although China's coal prices have skyrocketed,
electricity and heating have not followed suit.
But according to Monday's circular, if coal prices increase by
more than 10 percent, heat supply providers have the right to
adjust their prices accordingly.
(Xinhua News Agency November 9, 2005)