The Chinese central government has kicked off small-scale experiments in various cities to prepare for a later nationwide reform on the central-heating system, believed to be the last welfare benefit of the planned economy.

The experiments started in about 15 northern provinces early this month. "It will trigger an reform on the final welfare system left over from the planned economy," said Qiu Baoxing, vice-minister of construction.

The main purpose of the reform is to set up a scientific mechanism in which individual users pay according to the quantity and quality of the heating service, noted Qiu, adding that the nation plans to build a market-oriented heating supply system in the following ten years.

Office clerk Guo Wei and over 1,000 of his neighbors living in a new community near the Dongzhimen area of downtown Beijing were chosen to participate in the test. They will pay according to how much heat they use. They used to pay according to the size of their apartments.

Since the test started, Guo always turns the heating valve down a little bit to lower the room temperature every morning before he leaves for work. "There is no need to keep the temperature at a high degree since no one is in the room," he said.

Many of Guo's neighbors do the same. This, however, would have been unimaginable before, because most heating fees used to be paid by people's work units. Just like a free apartment, free medicine and free higher education, a free central heating system was also an important content of the social welfare system in the nation's planned economy, which lasted for decades.

"It was a privilege of the employees of state enterprises in north China at that time to enjoy almost-free heat service, which seems irrational in the current situation," said Liu Min, a senior researcher with Gansu Academy of Social Sciences in northwest China.

The system encountered serious challenges a couple of years ago. Plenty of state enterprises could not afford heat fees, while individual consumers refused to pay. "Many people decline to pay, because they think the service is not good enough. In fact, the problem is that we have to maintain the heat supply but cannot get refunded," said Wang Ning, deputy general manager of the Lanzhou Heating Power Plant, in the capital of Gansu.

In fact, the problem of payment in arrears exists in a large number of cities. In northeast China's Shenyang and Harbin cities, consumers owe as much as 2.2 billion yuan (US$265 million) and 1.2 billion yuan, respectively, to heating companies.

On the other hand, waste is a widespread problem. If a room is hot, the majority of users will open a window rather than turn off the heating, because saving energy has nothing to do with the fees.

The situation will be totally different under the new system, Liu said. "People will try to save energy because they must pay themselves, and they pay according to the amount of consumption. And the heating companies will try to improve their service because competition is tough, and the government can shift its focus onto other issues like environmental protection and technological innovation," he noted.

Cai Wenhao, a professor of economics at the Lanzhou Business College, believes the reform will have a beneficial impact on the national economy, just as the reforms concerning apartments, medicine and higher education did before. "If the market is built up appropriately, this reform is likely to further stimulate domestic consumption," he said.

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