Price Hikes: Public Hearing Increasingly Important

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Last updated at: (Beijing Time) Tuesday, December 31, 2002

Price Hikes: Public Hearing Increasingly Important

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At a recent public hearing organized by the municipal government of Yinchuan, the capital of northwest China's Ningxia Hui Autonomous Region, consumer representatives aired their divergent opinions on the government's decision to raise the price of water by 71 percent, a decision which has already been approved by the regional government department in charge of pricing.

Ma Youchang, a 32-year-old representative, said, "Only when the price-fixing department listen to the opinions of our customers, can it fix the correct prices reflecting our will."

Over the passing year, the price bureaus of both Yinchuan City and the Ningxia Hui Autonomous Region, home to the country's largest Muslim population, organized several public hearings to collect the opinions of local consumers with regard to increases in the prices of electricity, taxi fares and water.

Similar hearings have been held in many other Chinese cities, and a great number of Chinese consider them part of their daily life.

The most significant public hearing was held in Beijing earlier this year on the price increases for railway fares during the Spring Festival, the Chinese lunar New Year. The hearing, televised by China Central Television, attracted widespread national attention.

Earlier, Qingdao City, in east China's Shandong Province, and Guangzhou City, in south China's Guangdong Province, also held hearings to seek the opinions of local residents on the raising oftaxi and train fares.

To standardize the public hearing system, the State Development Planning Commission worked out a provisional measure for government decisions on price adjustments in August of last year. It stipulates that when the government attempts to raise the price of water, electricity, coal, telecommunications, railway tickets or other items essential to the daily life of the Chinese people, public hearings must be held beforehand. The measure was amended last month to include procedures for selecting consumer representatives.

"This demonstrates that the right of participation of the Chinese people has received its due consideration. The scope of democratic decision-making is expanding in China," said Wang Yang,vice-minister of the State Development Planning Commission.

Public hearings are playing an increasingly important role in price adjustments by governments at various levels, and the opinions of consumers are often taken into account in governments'decisions.

Wang Xinjuan, a 57-year-old consumer, said, "Public hearings have put an end to special sectors' monopoly and are upholding the legitimate rights and interests of consumers. This is clearly a sign of social progress."

Chinese economists consider that arbitrary and disguised price increases by various sectors are detrimental to fair market competition, especially after China has entered the WTO. They stress that, in order to increase profits, companies must reduce production costs rather than increase prices.

The public hearing system benefits not only consumers and enterprises, but also governments. It helps to enhance the prestige and credibility of governments, Wang Yang said.

The public hearing mechanism has not been applied consistently,however. Hearings on telecom price hikes in Beijing, for example,aroused public criticism because the procedure and the process were not open to the public.

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