Energy Prices, Subsidies and Resource Tax Reform in C hina

The C hinese leadership in N ovember 2013 is determined to embark upon a new wave of comprehensive reforms in C hina. This is clearly reflected by the key decision of the T hird P lenum of the 18th C entral C ommittee of C ommunist P arty of C hina to assign the market a decisive role in allocating resources. To have the market to play that role, getting the energy prices right is crucial. While the overall trend of C hina's energy pricing reform since 1984 has been moving towards a more market‐oriented pricing mechanism, the pace and scale of the reform differ across energy types. This article discusses the evolution of price reforms for coal, petroleum products, natural gas and electricity in C hina, provides some analysis of these energy price reforms, and suggests that few areas of reforms could take place in order to have the market play that decisive role and help C hina's transition to a low‐carbon economy.