China plans reform of 2,000-year-old salt sector monopoly

Workers toiling on heaps of salt at Dabuxun Lake or Salt Lake in Golmud, the second largest city in the Qinghai province of China.
Workers toiling on heaps of salt at Dabuxun Lake or Salt Lake in Golmud, the second largest city in the Qinghai province of China.PHOTO: MATTHEW C. CRAWFORD

BEIJING (REUTERS) - China plans to shake up a 2,000-year-old government salt monopoly, dismantling controls on the price and distribution of edible salt.

While the government will still license salt producers, companies will be allowed to set prices, determine their own levels of production and choose distribution channels, China's State Council, or cabinet, said on Thursday (May 5).

At present, salt producers must sell to state-owned distribution companies that control how much they produce and distribution channels. Salt wholesalers can also only sell their products within a certain area.

Under the new scheme, the government will also encourage firms to consolidate and allow private injections of capital into existing salt companies. No new licenses will be granted to edible salt producers and wholesalers.

The government has held a monopoly over salt for more than 2,000 years according to state-owned news agency Xinhua, with salt revenues providing a key source of funds in ancient times.

The government would still continue to intervene in the market to prevent "abnormal" price fluctuations in salt prices, the statement said.

It also plans to the expand the supply of iodised salt, which helps to prevent iodine deficiency, a cause of intellectual and developmental disabilities.