Rumours circulate regarding division of China State Grid Corporation

Recent reports suggest that Chinese policy makers are studying and researching on detailed measures to dismantle State Grid Corporation of China (SGCC), the state-owned electric power monopoly into five independent companies by region. If the information materializes, there will be six regional power grid companies in China including the existing China Southern Power Grid Company Limited.

It is reported that relevant departments and commissions will start to restructure SGCC in the aftermath of this year’s National People’s Congress and the Chinese Political Consultative Conference. Industry insiders believe that this will usher in an independent pricing scheme for power grid companies; in addition, regulatory bodies will find it easier to evaluate and compare the operating performance of power grid companies. Moreover, each power grid company can improve its accountability and transparency by seeking business diversification and public listing, all in the effort to enhance operating efficiency.

Is this a positive move for the Chinese power business?