Bill Dodson is the chief editor of ChinaEnergySector.com and author of the book: “China Inside Out.” Dodson says there’s more to this energy shortage than, well, a shortage. China’s power companies buy coal at market rates. But China’s government forces them to sell power to consumers at artificially low prices — prices that don’t cover their costs. So they just turn the power off.
Why does China’s government insist these companies sell power at bargain basement prices? Dodson says there are three reasons.
DODSON: Social stability, social stability, and social stability. So if energy becomes more expensive than consumers are comfortable with paying, they will actually protest. They will come out onto the streets. And that really is one of the last things the central government wants.
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