China will introduce a franchise heating supply system in urban areas in a bid to regulate the market, according to a government document.

The document, jointly issued by the Ministry of Construction, the State Development and Reform Commission, the Ministry of Finance in cooperation with five other departments, encourages state-owned, private and joint-stock companies to bid for the franchise to engage in heating supply in designated urban areas within a certain period of time.

The document calls on local governments to formulate unified programs on pipeline networks for heat supply and unify standards for service, market access and price monitoring, describing it as a precondition for the heating market reform.

Local governments are also asked to streamline administration of the heating supply trade, with focus shifting to formulating the sector's development program, regulating the market and maintaining the market order.

The document urges state-owned heating supply firms, which dominate the sector in urban China, to improve corporate governance through diversifying the sources of investment.

(Xinhua News Agency August 4, 2003)