A national reform will start this winter to establish a commercial urban heating supply mechanism and stop welfare that has provided free heating to staff at state-owned enterprises and institutions for several decades.

State-owned enterprises and institutions are supposed to give their employees subsidies for heating every month instead of transferring the payment for heating from their accounts directly to those of heating companies.

When these residents pay for the use of heating themselves, the regular buying and selling relationship will be established between the clients who use the heating and the heating suppliers.

The significance of this move is far more than just shifting a sum of money for special use from one pocket to another.

Just as Vice-Minister of Construction Qiu Baoxing says, such a reform is a prerequisite and a key move for a fundamental change in the traditional mode of heating supply.

Only when individual users pay for the use of heating themselves is it possible for heating companies to charge according to the exact amount of heating they have used. And only when residents have to open their purses will they care about how fast the hands in heating meters run.

With this awareness, residents will consider how efficient a house is in saving heating when they choose to buy one. This will push developers to take into consideration the element of energy saving in the designing of residential buildings.

Now, waste is surprisingly high in the supply of heating. Statistics reveal that 30 percent of heating is wasted because of leaking before it arrives in residential buildings. The lack of valves to adjust the use of heating has resulted in the waste of another 7 percent. In this case, the cost is very high for these state-owned heating companies.

If the cost for central heating is higher than that from gas stove, residents will choose the latter. If that were the case, those heating companies would lose clients. So lowering down cost would be their only way out to survive.

As a result, they will have to change those old pipelines and update facilities to reduce the waste. They must also renovate the heating supply systems within individual homes to guarantee that residents will be able to control how much heating they want to use and switch off the heating when they are away for holidays.

The vice-minister of construction said that some 30 percent of heating could be saved if residential homes had valves to control the use of heating.

If market mechanisms are introduced into the heating supply sector, competition will help reduce the waste of energy resources by a larger margin.

We hope that this move will initiate an even deeper reform in this sector for more efficient use of energy resources.

(China Daily September 12, 2006)