China to Adopt Progressive Pricing for Water and Electricity Nationwide

The term "progressive pricing" is now being used by China's macro-economic watchdog when talking about expected hikes in water and electricity rates for many people across the country this year.

And, as we hear from our Damin, while some analysts say the revised prices are a justified way to cut back on using natural resources, the expected price bumps shouldn't be passed on those who can't afford it.

Reporter:

Peng Sen, Vice-Director of the National Development and Reform Commission, says adopting the "progressive pricing system" for resource products is part of their overall plan to create a more environmentally-friendly economy.

"The pricing adjustment to resource products should be seen as an important part of economic restructuring. A progressive water and electricity pricing system will be adopted gradually this year."

Beijing is piloting the new system in its four central districts. The capital also plans to increase the price of gas, heating and parking this year.

Wang Xixin is a law professor at Peking University. He says "progressive pricing" is the best option available, especially when it comes to water.

"Progressive pricing has a clear advantage in keeping basic water use affordable. It can balance saving water and protecting the basic needs of low-income groups."

In the water-short capital, water prices have doubled over the last decade. Still, some in Beijing say they can live with a moderate increase in the cost of their water, as long as it's done equitably.

"I agree. But I hope policymakers can do more research and set the threshold as quickly as possible."

Wang Xinxi says it is important to find a reasonable threshold.

"The costs for the basic resources people need to live shouldn't go up. Local governments can even consider subsidizing this part."

Low-income Chinese families generally have a reputation of being very conscious when it comes to saving water and other public utilities.

"I never use my washing machine for my underwear."

"I know lots of families, of course, including mine, who put stones in the tank of their flush toilets to save water."

Wang Xinxi says being environmentally-friendly shouldn't come at the cost of hurting low-income groups. And he points out policymakers are not supposed to consider financing residential water and electricity companies through the fees they charge.

Damin, CRI news.