Beyond the state/market dichotomy: Institutional innovations in China's electricity industry reform. (15th June 2020)

• Record Type: Journal Article
• Authors: Yu, Zichao
• Is Part Of: Journal of environmental management. Volume 264(2020)
• Publication Date: 2020-06-15
• Subjects: China power sector reform -- State/market dichotomy -- "Dual-track" transition -- Institutional analysis -- Electricity governance -- Political economy; Environmental policy -- Periodicals; Environmental management -- Periodicals; Environment -- Periodicals; Ecology -- Periodicals; 363.705
• DOI: 10.1016/j.jenvman.2020.110306
• Languages: English
• ISSNs: 0301-4797

Abstract

Abstract: China's electricity industry has gone through three decades of market-oriented reform, and this process is often interpreted as a tug of war between marketization and state control. However, this paper argues that a dichotomous conception of the state-market relationship cannot explain the evolution and complexity of China's electricity governance. By systematically analyzing the institutions of China's electricity reform, this paper identifies a sequence of innovations that align well with both the history of China's economic transition and the institutional underpinnings of China's economic governance. Also, by interpreting the respective roles of state and market in China's reformed electricity industry, this paper shows that state control and marketization are complementary rather than contradictory, and that their complementarity is best exercised in addressing issues like market fragmentation and renewable energy curtailment. Moreover, this paper presents two case studies – both on China's most recent electricity market experimentation – to elaborate how state and market jointly serve sectoral functions as well as broader economic and political goals. Highlights: State control and marketization are complementary in China's electricity reform. China's electricity reform delivers a sequence of institutional innovations. Institutions help explain the evolution of China's electricity governance.