China confirms state power split

The power shakeup is linked to China's leadership reshuffle

China is pushing ahead with plans to split up its electricity industry by the end of this year, official media has reported.

The massive power sector is currently controlled by the giant State Power Corp, which owns half the generating plants and almost all the distribution grid.

On Wednesday the government agreed to split it into five generation and two supply firms, the China Economic Times reported, saying the new units had till 15 November to issue their business plans.

But controversy surrounds the company's leadership ahead of the break-up. The president of the company has reportedly fled the country amid corruption scandals, leaving the vice president, Zhao Xizheng, in charge.

The president, Gao Yan, is thought to be hiding in a Western country after being responsible for a string of dubious deals, the 21st Century Business Herald magazine has reported.

All change?

The announcement on the power business, assuming State Power sticks to the timetable, is another step in the gradual opening up of China's state-controlled industries.

Foreign companies are now being given somewhat more leeway to buy shares in domestic Chinese concerns.

Earlier this month China's multifarious airlines were reorganised into three new "big players".

And the telecoms industry, fresh from its own reorganisation into four competing players, is now looking at listings not only in Hong Kong, the popular choice for mainland "red chips", but in the US.