Abstract
This article analyzes China’s current electricity sector reforms, arguing that they can be understood as a creative response of the party-state to a set of technical and resource constraints on the one hand, and, on the other, to its own dynamics of adapting to internal and external changes in order to maintain legitimacy. The article discusses how the historical trajectory of China’s power sector development shaped current technical constraints. Geopolitical concerns about energy security, the growing importance of international financial institutions for attracting the necessary foreign investment to build new capacity, and continuing problems with state-owned enterprises are all important factors in constraining the state’s ability to respond to existing technical and economic challenges. At the same time, the Communist Party’s reinvention of itself in a bid to stay in power also motivates and shapes its decisions about electricity. Moreover, the imbrication of the electric power sector with elite politics and top leaders’ personal power bases give the sector special importance in the larger process of reform. After discussing these issues, the article examines four challenges to successful electricity reform in China: recurring power shortages and surpluses, price distortions and market manipulations, institutional reorganization, and inter-regional equity. These challenges illustrate the larger and sometimes unintended consequences of reforms in the electricity sector.
