The commercialization of the heating supply system is urged to make a smooth transition, the Yanzhao Metropolis News reported. An excerpt follows:

The Ministry of Construction and seven other ministries jointly drafted a plan for China's heating system reform at the end of 2003, clearly stating "the heating supply will no longer be a welfare service; it should be commercialized."

Going commercial is an irreversible trend of China's heating supply system. Obviously, the government should no longer treat the heating supply as a welfare service but rather as a commodity.

Yet recently, the State Development and Reform Commission and the Ministry of Construction issued a notice requiring the heating supply in northern China be firmly guaranteed to local residents. The notice also said local governments should provide financial subsidy and interest-deducted loans to strapped enterprises, making heating accessible. Also noting heating companies must not stop supplying heat to enterprises that cannot afford to pay for the heating.

Heating supply was once regarded as a public welfare service. The government cannot give up the job of providing heat even after it decided to make it a commodity priced by the market.

However, such government protection can only be used once or twice to meet urgent needs. Otherwise, a healthy market for the heating supply will be ruined.

Three principles should be closely followed to ensure the smooth transition to commercializing the heating supply.

Firstly, heating supply cannot be changed abruptly from a welfare to a commodity. Its past operating mechanism should be maintained for some time.

Secondly, if heating was supplied as a public welfare, it should be provided impartially to everyone, not as a service exclusively confined to a preferred group.

Thirdly, the price of heating suppliers should reflect the supply and demand situation in the market.

(China Daily November 19, 2004)