Reform the enterprise before the price

As long as China Railway Corporation enjoys much more government subsidies than the other State-owned enterprises, it does not have a reason to raise railway ticket prices, says an article in Beijing Youth Daily. Excerpt:

After the former Ministry of Railway was replaced by the CRC, society has been concerned about changes to railway ticket prices, because the central government has sent clear signals that China’s railway system will be reformed according to market rules.

The CRC's heads and senior executives also echoed the central government's message saying that market reform should give CRC more rights to decide railway ticket prices.

China's railway ticket prices have been decided by the government and they are cheaper than they would have been without government subsidies.

Whether the reform will really pushes the ticket price higher depends on the CRC's operational model and the government's attitude.

The National Development and Reform Commission indicated recently the pricing mechanism will not be changed. This message is well grounded because CRC enjoys much more government subsidies than the other SOEs and the government will continue buy the huge debts left by the ministry.

It is right for the government to be very prudent and cautious in deciding railway ticket prices, as the prices concern the public's interests so much. Migrant workers and students account for a large proportion of China railway's passengers. CRC should not be blinded to the fact that these special groups of passengers should not undertake the costs of railway reform completely.

Or CRC should in the first place try to improve its service and management and develop into a real participant in the market. The problem now is CRC is the sole monopoly enterprise in its field and there is no market or competition at all.