By Shiwei Shao, World Bank
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Extra resources for China: power sector regulation in a socialist market economy, Parts 63-361
The present situation of "one organization with two roles" is a major impediment in a transition to a socialist market economy. In a socialist market economy, the role of government is to serve the wider social interest through indirect supervision of the economy rather than direct control. The role of enterprises is to respond to socialist market signals and to earn profits through efficient operation. One organization cannot serve both roles without conflict. This conflict is presently kept in check by limiting managerial autonomy and commercial independence of power enterprises.
If the State Council agrees with these recommendations, it is then recommended to issue rules that are consistent with the recommended policies. In the future, additional legal reforms will be needed to establish the recommended regulatory system and to further deepen reform of the power sector. The Electric Power Law may need to be amended or Page xxi supplemented by additional laws as the need for further legal reforms becomes evident. Proposed Use of Legal Instruments State Council Regulations State Council regulations should be relatively general, leaving the development of specific standards to regulations issued by the central and provincial power regulatory authorities, and leaving the application of those standards to case-by-case determinations by the regulatory authorities.
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