Power shortages in China have led to a nationwide boom in power plant construction and though demand is still rising, a significant proportion of the new capacity is likely to be in surplus leading to a glut. The Chinese electricity sector is also experiencing considerable transitional difficulties in implementing the reforms undertaken in 2002. The biggest obstacle to greater efficiency and lower costs has been the supply-demand imbalance - which prevents any form of competition among bulk suppliers - and the absence of effective regulation.
