Project approval processes should be streamlined. In 2000, China took an important step in this direction through State Council Circular No. 73, which greatly reduces the time and effort required for the approval of projects that do not require comprehensive balancing. The principles outlined in Circular 73 should be extended through supporting regulations that will include most energy projects, which do require comprehensive balancing. The government still relies on Chinese companies to participate in regulatory decision-making. Current reform efforts aimed at establishing a clear and complete separation of regulatory and commercial functions should be strengthened.
China needs a clear and coherent natural gas policy.
Regulation of the gas industry remains unclear and fragmented. For example, it is unclear whether recent reforms allowing majority foreign stakes in the large West-East gas pipeline are applicable across China in other projects. Permission to invest in local distribution networks appears to depend on local, non-transparent conditions. Gas pricing should be reformed. Shanghai, Shandong, Zhejiang, Heilongjiang, Liaoning, and Jilin.