Responsive policies

Unlike in previous years, this year the NDRC issued a series of related policies while raising the price of refined oil products, which include subsidies to some social groups and public service sectors, a price linkage mechanism for related industries and a fiscal adjustment for oil enterprises. All these show that the Chinese Government is trying its best to reduce the negative impact of oil price hikes on enterprises and the whole society.

The policy of providing subsidies to disadvantaged communities and public service sectors won extensive acclaim. And this is the first time that China has levied special fees on oil producers selling domestically produced crude oil and used the funds to help disadvantaged communities ease the burden caused by the rise in oil prices. It has a positive meaning for balancing the interests of different groups and keeping social stability. But there is also concern about whether or not this sum of money will really go to farmers and other disadvantaged groups. Some believe that the government should take effective measures to prevent corruption.

As for the increased expenses of consumers, experts suggest that more funds be collected from all kinds of monopoly industries and industries that can earn sudden huge profits from a rise in oil prices in order to subsidize consumers or develop public services such as medical treatment, education and housing.

In addition, the Chinese Government also stepped up efforts on energy conservation this year. It has set a target of lowering energy consumption, worked out medium- and long-term plans for saving energy and is amending the Law on Energy Conservation. Recently, the Ministry of Finance said it is planning to release new tax policies to encourage research on and the use of alternative energy sources.

Not only the government but also companies are thinking of reducing energy consumption. Some airline companies have started to trim the number of magazines at each seat to reduce the weight of the plane so as to lower fuel consumption. Logistics companies prefer to use energy-saving and environment-friendly vehicles for transportation. Auto manufacturers are busy with the development of small engines and energy-saving cars to satisfy society's demands.

The author is with the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce