Price reform is a crucial part of China’s market reform of its economy. The crux of price reform is that the government should delegate more power to the market and cut red tape, says an article in The Beijing News. Excerpts:

The State Council’s meeting last Friday decided to expedite the hard price of reform, proposed to let the market set the price to a larger extent and lay out a series of concrete measures. It means that price-reform action plans will be released soon.

China has made some progress in price reform in the past year. Some price relations that had been distorted for a long time are being adjusted.

Price reform concerns reforms in many other areas. To make breakthroughs in price reform requires the government to delegate more powers to the market. Affiliated with the power to be delegated are huge profits and interest, which made the reform difficult in the past 10 years.

Some departments hold tight to their own turf and would not release their control over pricing rights. The serious corruption cases in the pricing department of the National Development Reform Commission prove how lucrative these pricing rights can be.

Some prices controlled by the government do not benefit the people. For example, the government has lowered the prices of some medicines on its list several times in the past decade, but medical bills remain a heavy burden for most Chinese.

Lifting the government’s control on energy and resources prudently can encourage more market competition and let consumers enjoy better services and products.

Price reform in water, coal, electricity and infrastructure construction will necessarily influence the livelihood of the lower-income group. The government should set up a price compensation mechanism for them, when necessary.