National Development and Reform Commission: Coal price reform and electricity price reform are "two-pronged"

On the morning of January 12, the National Development and Reform Commission held a special press conference on stabilizing prices. Wan Jinsong, Director of the Price Department of the National Development and Reform Commission, Niu Yubin, Deputy Director of the Price Department, and Zhou Banxue, Deputy Director of the Price Department, attended the press conference and answered reporters' questions on the overall price trend, ensuring the supply and price stability of important people's livelihood commodities, maintaining energy prices, the price situation of the domestic pig market, price subsidies for people in need, and the prices of important people's livelihood commodities during the Spring Festival.

Work on stabilizing energy prices

Taking coal as the "anchor", we will do everything possible to stabilize the prices of commodities such as energy. Innovate and improve the coal market price formation mechanism, propose a reasonable range of coal prices, clarify the standards for identifying price gouging behavior in the coal field, accelerate the release of advanced coal production capacity, and realize that coal prices generally operate within a reasonable range. The stability of coal prices is for stabilityElectricity Price, , lay a solid foundation for stable energy use costs. Implement the natural gas price policy, give full play to the role of domestic gas guarantee, improve the medium- and long-term gas supply contract mechanism, and maintain the basic stability of domestic gas prices for residents.

Important measures to maintain the stability of energy prices

First, innovate mechanisms. Based on the basic national conditions based on coal, adhere to the systematic concept,Coal priceReform and electricity price reform are "two-pronged" to support mechanism innovationEnergy supply guaranteeStabilize prices. Reform and improve the coal market price formation mechanism, and in accordance with the principle of "lower limit to maintain coal and upper limit to maintain electricity", we propose a reasonable range of coal prices, and simultaneously clarify that coal and electricity prices can be effectively transmitted within a reasonable range; further deepen the market-oriented reform of coal-fired power generation on-grid electricity prices, innovate and establish a power purchasing system for power grid enterprises, and guide the reasonable formation of market transaction electricity prices. The above reform measures have achieved the "three-price linkage" of coal prices, on-grid electricity prices and user electricity prices through market-oriented methods, effectively stabilizing coal prices, and thus stabilizing electricity prices and energy consumption costs. Adhere to ensuring people's livelihood and maintain the stability of electricity prices for residents and agriculture.

The second is to stabilize expectations. Through the method of "playing clear cards and setting boundaries", we will continue to strengthen publicity and interpretation and expectation guidance, and actively respond to the risks of abnormal price fluctuations. The plan to improve the coal price formation mechanism was officially implemented on May 1, 2022. An announcement was issued simultaneously to clarify the standards for identifying price gouging behavior in the coal field, 16 series of interpretations of coal price policies were released in succession, 3,000 "Coal Price Policy Promotion and Interpretation Manual" were compiled and printed to coal enterprises and relevant units, and the major production and production provinces were deployed to hold policy briefings many times to comprehensively and fully interpret the "new policy" of coal prices and promote the formation of a broad market consensus. Invite talks and reminders to relevant coal production and trading enterprises and information institutions, and promptly correct behaviors such as fabricating and disseminating price increase information and malicious speculation.

The third is to strengthen supervision. Establish a coal price monitoring and cost investigation system, and carry out coal price index behavior assessment and compliance review. Monitor the spot prices of coal mines, ports and factories every day, monitor medium- and long-term transaction prices every week, dispatch contract information of key power generation companies every month, promptly understand the first-hand market price situation, and promptly warn and deal with abnormal fluctuations when they are found. Carry out dragnet-style investigations and focus-based verifications on clues suspected of coal prices exceeding the reasonable range, and resolutely ensure that they are discovered and dealt with.

The following text is included in the full text:

State Development and Reform Commission Press Conference Introduction to the achievements of my country's price stabilization work in 2022 and the next work arrangements

Meng Wei:

Dear media friends, good morning everyone! Welcome to the first press conference in 2023

Today's press conference focuses on "stabilizing prices", which is a topic that everyone is very concerned about. The Central Economic Work Conference clearly requires that in 2023, we should focus on stabilizing growth, employment and prices. This morning, the National Bureau of Statistics just released my country's 2022 consumer price index, and my country has successfully achieved its annual regulatory target. In another 10 days, we will usher in our traditional Chinese New Year. At such a time node, how do you view the current price situation? How to do a good job in stabilizing prices this year? How to ensure the stability of the prices of important livelihood commodities during the Spring Festival? These are all issues that everyone is concerned about.

In order to respond to the concerns of all parties in a timely manner, today we are very happy to invite:

Director of the Price Department Mr. Wan Jinsong,

Ms. Niu Yubin, Deputy Director of the Price Department,

Mr. Zhou Banxue, deputy director of the Price Department, attended the press conference and asked them to answer questions of concern to everyone.

Let’s go directly to the questioning session. Please ask the reporters and friends.

reporter:

Please introduce the overall situation of my country's prices in 2022. What measures has the country taken to ensure the smooth operation of prices? What is the price trend in 2023?

Wan Jinsong:

In 2022, all regions and relevant departments will resolutely implement the decisions and deployments of the CPC Central Committee and the State Council, focus on strengthening the construction of the grain and energy production, supply, storage and sales system, and focus on strengthening the price regulation of important livelihood commodities and commodities. my country's total price level continues to operate smoothly. The single-month increase of the domestic consumer price index (CPI) has always been below 3%, up 2% for the whole year, significantly lower than the increase of developed economies such as about 8% in the United States, more than 8% in the euro zone, and about 9% in the United Kingdom, and is also significantly lower than the increase of 7%-10% in emerging economies such as India, Brazil, and South Africa (January-November). The international expansion and domestic stability are very clear.

Looking back at the work of stabilizing prices in 2022, the focus is on doing a good job in three aspects: "stabilizing people's livelihood commodities, stabilizing bulk commodities, and stabilizing market expectations". First, focus on grain and live pigs and strengthen the mayor's responsibility system of "vegetable basket" as a starting point, and make every effort to stabilize the prices of important livelihood commodities. Appropriately increase the minimum purchase price of rice and wheat to promote stable and increased grain production. Carry out reserve adjustments in a timely manner to alleviate the sharp fluctuations in the price of pork. Regularly dispatch and guide local governments to establish and improve price control mechanisms for important livelihood commodities, and take multiple measures to ensure supply and stabilize prices. Second, use coal as the "anchor" and do everything possible to stabilize the prices of commodities such as energy. Innovate and improve the coal market price formation mechanism, propose a reasonable range of coal prices, clarify the standards for identifying price gouging behavior in the coal field, accelerate the release of advanced coal production capacity, and realize that coal prices generally operate within a reasonable range. The stability of coal prices has laid a solid foundation for stabilizing electricity prices and stabilizing energy consumption costs. Implement the natural gas price policy, give full play to the role of domestic gas guarantee, improve the medium- and long-term gas supply contract mechanism, and maintain the basic stability of domestic gas prices for residents. The third is to innovate expectations management mechanisms and stabilize market expectations. Strengthen the release of policy information and timely release regulatory signals. Strengthen the coordinated supervision of futures and spot markets to curb excessive speculation and speculation.

Looking ahead to 2023, although international commodity prices may fluctuate at high levels and imported inflation pressure still exists, my country's prices have a solid foundation for maintaining stable operation. Grain production has been continuously bumper, pig production capacity is reasonably abundant, important livelihood commodities are sufficient, basic energy guarantee is strong, supply and price stability system is further improved, and we have full confidence and ability to continue to maintain overall price stability.

reporter:

Important people's livelihood commodities are related to the people's "rice bags" and "vegetable baskets". What work has the country carried out in ensuring supply and stabilizing prices?

Niu Yubin:

Important livelihood products are closely related to the people's basic lives. In 2022, the National Development and Reform Commission resolutely implemented the decisions and deployments of the CPC Central Committee and the State Council, actively played a coordinated role, insisted on departmental coordination and central-local linkage, and did a series of solid and effective work to ensure the supply and price stability of important people's livelihood commodities such as grain, oil, meat, eggs, and vegetables. The process was "not easy" and the results were "extraordinary". The food price index in the CPI rose by 2.8%, significantly lower than the increase of about 10% in major economies such as the United States and Europe. The comparison of domestic and foreign grain prices is more obvious. The monthly year-on-year increase in international wheat and corn prices reached 74% and 36%. The price trend of wheat and corn in my country is relatively flat, and the retail price of finished grain is more stable. The retail price of rice in 36 large and medium-sized cities throughout the year decreased by 1% compared with the previous year, and the retail price of flour increased by 3% compared with the previous year. The following work has been carried out:

First, we must focus on mechanism construction. Strengthen the common responsibility of the Party and the government in food security, strengthen the mayor's responsibility system of the "vegetable basket", promote local governments to establish and improve plans and plans such as monitoring and early warning, expectation guidance, regional cooperation, reserve adjustment, production and sales connection, and gradually improve the price control mechanism for important livelihood commodities.

The second is to strengthen monitoring and early warning. Closely monitor the operation of prices of important livelihood commodities in various places, strengthen market situation analysis and judgment, timely discover potential problems and prompt early warnings. Establish a regular scheduling system to remind the shortcomings and risks in the work of ensuring supply and stabilizing prices in various places, strengthen work responsibilities, and supervise the filling of shortcomings and strengthening weaknesses.

The third is to enrich regulatory measures. Guide all localities to strengthen supply and price stability around the entire chain of production, supply, storage and sales. In terms of production, stabilize grain and pig production, and the main production areas and main sales areas share the responsibility of ensuring supply and price stability; urge large and medium-sized cities to implement the minimum per capita vegetable land ownership requirement. In terms of circulation, we will promote cross-regional cooperation between the main production areas and the main sales areas, carry out joint guarantee and supply; guide local governments to smooth transportation and logistics and reduce circulation costs. In terms of reserves, guide local governments to implement the reserves of finished grain and oil, pork, winter and spring vegetables in northern cities and timely release them to ensure market supply. The terminal link will improve the urban distribution capacity of large and medium-sized cities, carry out affordable sales in a timely manner, and ensure sufficient supply and stable prices in the terminal market.

Overall, through joint efforts of all parties, my country's important livelihood commodities have a solid material foundation, a relatively complete regulatory system, and rich practical experience, and are fully capable and qualified to ensure the basic living and consumption needs of the people.

reporter:

Affected by various factors, international energy prices have risen sharply in 2022. What important measures have the country taken to maintain the stability of energy prices?

Zhoubanxue:

In 2022, the international energy supply and demand situation will be complex and severe, and prices will rise sharply, and many countries will encounter energy crises; my country is a major energy consumer and importing country, with international impacts and frequent extreme weather, and energy supply and price stability faces major risks and challenges. The National Development and Reform Commission resolutely implements the decisions and deployments of the CPC Central Committee and the State Council. On the basis of continuously strengthening the construction of the energy production, supply, storage and sales system, it innovates mechanisms, stabilizes expectations, and strengthens supervision, and strives to maintain overall stability of energy prices with coal as an anchor. From January to November 2022, energy prices in the US and euro zone CPI rose by about 27% and 38% year-on-year respectively, while the prices of residents' hydropower and fuel in my country's CPI rose by only about 3%, and the price of gasoline and diesel prices also significantly lower than those in the US and Europe.

First, innovate mechanisms. Based on the basic national conditions of coal as the main focus, adhere to a systematic concept, take a "two-pronged approach" in coal price reform and electricity price reform, and support energy supply and price stability through mechanism innovation. Reform and improve the coal market price formation mechanism, and in accordance with the principle of "lower limit to maintain coal and upper limit to maintain electricity", we propose a reasonable range of coal prices, and simultaneously clarify that coal and electricity prices can be effectively transmitted within a reasonable range; further deepen the market-oriented reform of coal-fired power generation on-grid electricity prices, innovate and establish a power purchasing system for power grid enterprises, and guide the reasonable formation of market transaction electricity prices. The above reform measures have achieved the "three-price linkage" of coal prices, on-grid electricity prices and user electricity prices through market-oriented methods, effectively stabilizing coal prices, and thus stabilizing electricity prices and energy consumption costs. Adhere to ensuring people's livelihood and maintain the stability of electricity prices for residents and agriculture.

The second is to stabilize expectations. Through the method of "playing clear cards and setting boundaries", we will continue to strengthen publicity and interpretation and expectation guidance, and actively respond to the risks of abnormal price fluctuations. The plan to improve the coal price formation mechanism was officially implemented on May 1, 2022. An announcement was issued simultaneously to clarify the standards for identifying price gouging behavior in the coal field, 16 series of interpretations of coal price policies were released in succession, 3,000 "Coal Price Policy Promotion and Interpretation Manual" were compiled and printed to coal enterprises and relevant units, and the major production and production provinces were deployed to hold policy briefings many times to comprehensively and fully interpret the "new policy" of coal prices and promote the formation of a broad market consensus. Invite talks and reminders to relevant coal production and trading enterprises and information institutions, and promptly correct behaviors such as fabricating and disseminating price increase information and malicious speculation.

The third is to strengthen supervision. Establish a coal price monitoring and cost investigation system, and carry out coal price index behavior assessment and compliance review. Monitor the spot prices of coal mines, ports and factories every day, monitor medium- and long-term transaction prices every week, dispatch contract information of key power generation companies every month, promptly understand the first-hand market price situation, and promptly warn and deal with abnormal fluctuations when they are found. Carry out dragnet-style investigations and focus-based verifications on clues suspected of coal prices exceeding the reasonable range, and resolutely ensure that they are discovered and dealt with.

A series of reform, regulation and regulatory measures have effectively stabilized my country's energy prices, provided strong support for stabilizing growth and protecting people's livelihood, and are in sharp contrast to the sharp rise in energy prices in European and American countries. For example, in 2022, both electricity prices and gas prices of Chinese residents remained stable, while European and American countries rose significantly. The year-on-year increase in electricity prices in the United States and the euro zone from January to November 2022 reached 12.9% and 36.3% respectively, and the year-on-year increase in natural gas prices reached 26.6% and 56.5% respectively.

reporter:

In response to the cyclical fluctuations in pig prices, what measures has the country taken to promote the running of pig prices within a reasonable range? What will happen to the domestic pig market price situation in the future?

Wan Jinsong:

In 2009, the country issued a plan for the regulation of pig prices and revised and improved it three times in 2012, 2015 and 2021. The main purpose is to alleviate the cyclical fluctuations in pig prices and promote the long-term and healthy development of the pig market.

Due to the superposition of cyclical, seasonal and beyond expectations, the live pig market situation in 2022 is relatively complicated. The National Development and Reform Commission, together with relevant departments, strengthens monitoring, analysis and early warning, strengthens expectations guidance and market supervision, strengthens reserve adjustment, and conducts market regulation accurately and effectively. First, strengthen monitoring, prediction and early warning. Continuously enrich the monitoring indicator system, strengthen research and consultation, timely grasp market trends, and immediately warn of problems when they are found. The second is to actively carry out reserve adjustments. When live pig prices are running at a low level in the first half of 2022, the central pork reserve collection and storage work will be carried out in a timely manner, and the central pork reserve will be collected and stored in 13 consecutive batches. At the same time, urge and guide local governments to simultaneously collect and store inventory to boost market confidence. When the supply of live pigs was tight and prices rose too fast in the second half of the year, central pork reserves were placed in seven consecutive batches, and local governments were guided to simultaneously release local reserves to increase market supply. The third is to strengthen market supervision. Special meetings have been organized many times to remind enterprises to strengthen self-discipline in behavior and require that volume and price increase should not be controlled, or price increase should not be colluded. We interviewed some self-media that deliberately exaggerated the atmosphere of rising live pig prices, and reminded some market institutions that exaggerated their words. Strengthen the coordinated supervision of futures and spot markets to prevent excessive capital speculation. Fourth, actively stabilize market expectations. By holding press conferences and publishing information drafts, market expectations management will be strengthened and breeders will be guided to arrange production and operations reasonably. A series of measures to ensure supply and stabilize prices have alleviated the cyclical fluctuations in pig prices.

We have noticed that due to factors such as weak pork consumption compared with previous years and the phased increase in pig supply, domestic pig prices have declined recently. All parties believe that the current domestic pig production capacity is generally in a reasonable range, and it is expected that the price fluctuation in 2023 will be smaller than in 2022. The National Development and Reform Commission will work with relevant departments to continue to keep a close eye on market trends and take timely regulatory measures in accordance with the plan provisions to promote the stable operation of the pig market.

reporter:

The needy are very sensitive to prices. What measures has the country taken to ensure the basic living of the needy in terms of price subsidies? What is the current situation of price subsidies?

Zhoubanxue:

The CPC Central Committee and the State Council attach great importance to the basic living security work of people in need. In recent years, the National Development and Reform Commission has, in accordance with the decisions and deployments of the CPC Central Committee and the State Council, focused on "stabilizing prices" on the one hand and "protecting people's livelihood" on the other hand. In conjunction with relevant departments, it has repeatedly improved the price subsidy linkage mechanism and resolutely kept the bottom line of people's livelihood. First, the scope of protection is constantly expanding. Based on seven types of groups including urban and rural minimum living allowance recipients, extremely poor people, and unemployment insurance benefits, those who receive unemployment subsidy and marginal populations will be further included in the scope of the price subsidy linkage mechanism guarantee. Currently, a total of about 67 million people in need are covered. Some regions have further expanded the scope of protection based on local actual conditions. The second is to continuously optimize the startup conditions. The monthly year-on-month increase in CPI in the startup conditions will be reduced from 3.5% to 3%. At present, any condition that the CPI year-on-year increase reaches 3% in a single month or the year-on-year increase in food prices in a CPI is met, that is, the price subsidy linkage mechanism is activated. In some areas, based on local actual conditions, the conditions for starting up have been further reduced. Third, the subsidy standards have steadily increased. The standard for issuing price subsidies is linked to the urban and rural minimum living security standards. All localities will promptly raise subsidy standards based on the adjustment of urban and rural minimum living security standards and the rise in prices. Some regions have also issued one-time subsidies based on local actual conditions. Fourth, the timeliness of distribution are constantly improving. The time limit for issuing price subsidies is shortened from the early "monthly calculated and quarterly payment" to the current "monthly calculated and monthly payment" and issuing it in place in the month when the relevant price index is announced, so that people in need can get price subsidies as soon as possible. Fifth, financial guarantees are more powerful. At present, the price subsidy linkage mechanisms in various places have clarified the source of price subsidy funds. At the same time, the central government provides appropriate support to the assistance and pension preferential treatment for people in need in various places every year. Through strong financial guarantees, we can ensure that price subsidies are fully distributed.

Since 2020, local governments have issued a total of about 37.5 billion yuan in price subsidies, benefiting 730 million people in need; of which about 6.5 billion yuan in price subsidies were issued in 2022, benefiting about 200 million people in need, playing a positive role in alleviating the impact of rising prices and ensuring the basic lives of people in need.

reporter:

As the Spring Festival approaches, how can the country take measures to ensure the basic stability of the supply and prices of important livelihood commodities in the festival market?

Niu Yubin:

The Spring Festival is an important traditional festival in our country, and it is of great significance to do a good job in ensuring the supply and price stability of important livelihood commodities. Based on the previous work, the National Development and Reform Commission has recently re-deployed and re-arranged the work of ensuring supply and stabilizing prices during the holidays in conjunction with relevant departments. First, strengthen monitoring, analysis and early warning. Guide local governments to closely monitor the operation and price changes of residents' consumer markets, track the flow of returning home and tourists, analyze and judge the impact on important urban and rural livelihood commodity markets, promptly discover potential problems and make forward-looking arrangements. The second is to strengthen the mayor's responsibility system of the "vegetable basket". Guide all localities to actively play the role of the main body to ensure supply and stabilize prices, sort out the production and demand and reserves of important local livelihood commodities, and make preparations for enriching reserves, production and sales connections and emergency plans in advance. The third is to ensure sufficient supply. Guide local governments to strengthen supply allocation, support backbone circulation entities such as agricultural product wholesale markets and large supermarkets to increase their efforts in advance preparation and distribution, and enrich variety selection. Fourth, strengthen market supervision. Strengthen the inspection and inspection of important livelihood commodities markets, guide and encourage market operators to operate in accordance with the law, crack down on illegal and irregular behaviors such as price gouging, and maintain normal price order.

Judging from the recent scheduling situation, important livelihood commodities in various places are sufficiently supplied and reserved, and market prices are stable and orderly, which can ensure the consumption needs of urban and rural residents during the holidays.

Meng Wei:

Thank you 3 publishers. Today's press conference ends here, thank you everyone!