Analysis of Reasonable Energy Price Ratios in China

Abstract

As a result of China’s rapid economic growth, energy demand has increased significantly in recent years. Consequently, energy pricing has become increasingly prominent. This paper defines reasonable energy price ratios and establishes models to analyze them from the aspects of input/output standards, economic standards, and international standards according to the structure of the energy prices. Furthermore, based on the socioeconomic conditions in China, prices of coal, natural gas, and electric power are selected as examples for analyzing the price ratios of regulated and nonregulated energy prices under three evaluation criteria. Finally, reasonable energy price ratios in China are determined through a comprehensive analysis. The paper concludes that these ratios are significant for developing countries undergoing energy market oriented reforms such as China.