中國年度投資主題(pdf 12頁)(英文版)

The raising of seven controlled prices
1. A long pipeline for price adjustments
China plans to raise prices in seven tightly controlled industries in 2005-06, with
the exact sequence centrally managed in order to keep inflation low. We expect
the first such adjustment on coal prices in November 2004, followed by gasoline
and diesel (possibly in Q105), railway services (Q2-Q305), port handling, water
gas, state-owned enterprise (SOE) wages, and finally, electricity.
2. Coal price: The first test of deregulation
The government practises regular intervention to keep coal prices down. Some
backlash was experienced in April when several coalmines refused to honour contracts they had reluctantly signed in January. However, we expect less government intervention in the 2005 contract negotiation.
3. Gasoline/diesel price departs from “the formula” for a year In 2001, the government introduced a formula to link domestic prices of gasoline/diesel with global prices. However, with the rising crude oil price, the formula has been in abeyance for about a year. We believe an increasing number of officials now feel that relaxing this formula has resulted in significant negative side effects.
4. Ports and particularly railways urgently need higher tariffs
Despite China’s slowdown, bottlenecks in ports and particularly railways have
intensified. The government plans to raise tariffs to improve operators’
profitability and encourage capex. In addition, higher charges for water and gas
utilities are also on the government’s agenda to encourage conservation and allow operators to achieve breakeven.
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