Southern Press News Time: December 22, 2008 Source: Southern Metropolis Daily, Chinese herbal breast enhancement formula Picture data ■ Broadcast Report Oil price low does not align with international standards On November 24, 2008, Sina Finance News reported that Han Wenke, Director of the Energy Research Institute of the National Development and Reform Commission (NDRC), stated that China would not establish a mechanism for oil prices to be linked with international crude oil prices. Furthermore, Han Wenke predicted that the upcoming Central Economic Work Conference at year-end would release more policies to stimulate the economy, gradually reviving the currently sluggish domestic energy demand. It is expected that by the second half of next year, signs of recovery will appear. "But it is definitely impossible to return to the level of double-digit annual growth in energy consumption seen three or four years ago," he said. Regarding the real-time linkage mechanism between refined oil prices and international oil prices, Han Wenke indicated that such a mechanism would not be established in the short term. The underlying implication of the linkage mechanism is that prices would reach parity with international oil prices all at once. However, as a developing country, China cannot realistically align all its prices with international standards. As for how to rationalize energy prices, Han Wenke believed that prices should be determined by market forces. In specific price formulation, the relationship between the state, enterprises, and consumers must be harmonious. During the recent period when energy prices were high, domestic energy companies were operating at a loss. To harmonize the relationships among the state, enterprises, and consumers, some price changes may eventually be passed on to consumers, while others will require the state or enterprises to forego some of their profits. High oil prices need to align with international standards On January 4, 2008, International Business Times reported that international oil prices broke through the $100 mark for the first time on January 2 this year. Han Wenke, Director of the Energy Research Institute of the NDRC, stated that the likelihood of a short-term drop in oil prices was small, and high oil prices might persist for a long time. There was an urgent need to study the introduction of fuel taxes under the backdrop of high oil prices. Han Wenke said that high oil prices had some negative impact on China's economic development and people's lives, but they were insufficient to affect the fundamental momentum of China's sustained rapid economic development. High oil prices mainly affected industries that consumed large amounts of oil, squeezing their profit margins and possibly leading to losses or even bankruptcies in some industries or enterprises. Han Wenke pointed out that China's current refined oil pricing mechanism still required further reform and improvement. Further alignment with international markets was needed to accelerate the transmission of price signals and enhance the role of the market in regulating supply and demand for oil products. At the same time, a pricing mechanism conducive to energy conservation and environmental protection must be formed. Against the backdrop of $100-per-barrel oil prices, domestic fuel tax reform has undoubtedly become one of the focal points of public discussion. Han Wenke expressed that from the perspective of encouraging fuel savings and equitable burden-sharing, as well as enhancing fiscal and taxation tools to regulate petroleum consumption, China should introduce the fuel tax as soon as possible. He believed that China's fuel tax not only involved fee-to-tax reform but also reflected the country’s basic national policies. Therefore, the timing of its introduction required specific research. However, given that high oil prices are likely to persist for a long time, we cannot wait indefinitely and must quickly study the issue of introducing fuel taxes under the backdrop of high oil prices. □ I've figured it out now: whenever money is taken from the pockets of ordinary citizens, it follows international practices; but when there are tangible benefits for the people, they never follow these international practices. It's a matter of selective interpretation. There's no way around it—losses outside the dike have to be compensated inside. Chinese citizens truly suffer, having to continuously pay the price for officials' corruption and incompetence, extravagant errors and lies, as well as the irresponsibility towards people's livelihoods and society.