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China Daily Website

Railway ticket prices need gov't control

Updated: 2007-03-14 10:52
By Liu Shinan ( China Daily)

China's nearly three decades' drive to reform and develop its economy has yielded, in addition to the remarkable growth of wealth, a pool of celebrated economists. They are interpreting, with old and new theories, various phenomena that happened during the transition from the State-planned economy to the market economy.

These scholars have won high public esteem with their explanations of how wealth is, and should be, produced and used. Some of them, however, are so obsessed with their theories that they sometimes ignore social reality and make stupid remarks.

A few days ago, a well-known economist commented on the government's decision not to raise train ticket prices during the Lunar New Year holidays, saying that the decision was "against the rule of market economy".

It is really shocking that a distinguished economist should have uttered such a remark that goes against common sense.

Common sense says that what is theoretically right may not be necessarily applicable in reality.

Even a beginner studying economics knows that market rules are not the only deciding force in the allocation of resources in an economy and that interference by the government is needed under certain conditions.

As a public resource operated on a national grid, railway transportation cannot be readily privatized under the present conditions in China, where trains are the largest fast carrier of passengers and cargo for long-distance travel. The railway has to be operated by the government.

With this in mind, the pricing of train tickets should not be purely decided by market supply and demand. Non-market factors should also be considered in the pricing.

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