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Regulating China's Power Sector: Creating an Independent Regulator without Autonomy*

Published online by Cambridge University Press:  14 May 2014

Chung-min Tsai
Chung-min Tsai*
Affiliation:
National Chengchi University, Taipei, Taiwan, ROC. Email: [email protected].
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Abstract

Throughout its period of economic transition, the Chinese state has readjusted its relationship with industry and developed new regulatory schemes. China's first industry-specific independent regulatory agency, the State Electricity Regulatory Commission (SERC), was created in 2003. Its operation does not follow Western practice which adopts the best institutional arrangement for autonomous regulators. This article will examine the failings and regulatory capture of SERC. I argue that because the process of creating a new regulator involves resource reallocation and power redistribution, SERC has suffered both endogenous and exogenous disadvantages since its inception. The compromised institutional design, along with insufficient resources and fragmented authority, has considerably weakened SERC's regulatory capacity. Moreover, SERC was not designed as part of the reform schedule, but rather emerged later as a response to institutional necessities, which also contributes to its vulnerability. As a result, the state has exposed SERC to potential capture by both government entities and regulated enterprises.

Keywords

Chinapower reformindependent regulatory agencyState Electricity Regulatory Commissionregulatory capture
Type
Articles
Information
The China Quarterly , Volume 218 , June 2014 , pp. 452 - 473
Copyright
Copyright © The China Quarterly 2014 

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Footnotes

*

The author thanks Lowell Dittmer, You-tien Hsing, Chih-shian Liou and Steven Vogel for their helpful comments and suggestions. This research is partially supported by National Chengchi University's Top University Project and Taiwan's National Science Council (101-2410-H-004 -134 -).

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