China is seeking to attract foreign companies back into the power sector but is suffering from a murky regulatory environment and conflict within different levels of the government, according to state media.
The central government said it wants to reduce pollution by replacing part of the nation's coal consumption with natural gas and renewable energy. But provincial governments want to keep as many coalmines as possible open without having to invest in clean coal technology, in an attempt to maintain local employment and revenue and keep costs down.
Foreign direct investment accounts for less than 10 percent of the total power production capacity of the country with investors saying they are wary of entering the market because of unclear policies for future development and strong competition from cheap coal power producers.
China started a sweeping reform in the industry about this time last year, breaking up the monopoly of the State Power Corp, setting up an independent regulatory commission and changing the pricing scheme.