Taming the Tiger: The Problematic Role of the State in China’s Electric Power Sector

Abstract

This study analyzes China’s efforts in reforming the power sector since the 1980s, based on field interviews conducted and the secondary literature on China’s power sector. Building on the critiques of current literature, the study examines the role of the state in the processes of policy formulation and policy implementation. It finds that during the process of policy formulation, political interests and bureaucratic struggles limited the state’s commitment to improving the sector by rendering reform strategies incoherent and fragmented. During the process of policy implementation, the state’s infrastructural power has been undermined by its lack of institutionalized channels to carry out reform policies logistically and to deal with resistance and conflicts effectively. The paper concludes that contrary to conventional expectations, the ineffectiveness of state intervention in the power sector does not stem from the state’s apparently monopolistic strength, but rather, lies precisely in its de facto weakness. This role deviates substantially from the manner in which developmental and regulatory state proponents depict China’s reform-era state. Yet the diagnoses that this paper offers also differ fundamentally from neoliberal arguments, for the state is not only the problem but also the solution: in order to play a more effective role in industrial transformation in a changing domestic and international environment, it has to rely on itself in the long run to build new capacity and to nurture the growth of new institutions. These conclusions, I argue, could have important implications for the role of the state in strategic sectors in China and other Asian countries.

Keywords: Electric power, energy, state capacity, state-market relations, China, State-owned Enterprises