As the peak time arrives for Chinese people to travel home-bound for the Spring Festival (see ¡°Insufficiently trained? page 6), a 15-20 per cent price hike for travelling by train ?regarded by the majority of travellers as the most convenient, cost-effective and rapid form of transportation ?has once again attracted attention. The following are excerpts from two newspaper articles.

Public hearing necessary

An article by Zhang Guifeng of the Shanghai-based Youth Daily questioned the current practice whereby the railway department decides on the price hike.

It seems that such a price hike has become a natural part of the peak travel period around the Spring Festival. When answering a question from China Central Television, a Mi-nistry of Railways (MOR) official said there was no way that public hearings could be held each year to decide on price rises for train tickets.

There is no doubt that the MOR, the governmental department administering the railway industry, has the right to make adjustments to prices within the industry. However, under the current system, the MOR shoulders both the right of administration and the function of operation. While it can decide on the prices on behalf of the government, it can also benefit as an enterprise. This not only impairs the fair market order but also violates the natural rule of justice ?that no one should be his/her own judge.

Putting questions about the rationa-lity of the price increases aside, it is necessary to hold public hearings every year on these price rises in train tickets. The plan for the peak travel period should not be decided by the MOR alone but be drafted and implemented by the nation¡¯s macro-administration department, which is ?at least comparatively ?an outsider. This way, whether or not prices are raised, at least procedural justice will be guaranteed.

Abiding by market rules

An article by Pang Jiaoming in the Beijing Times argued that the increase in train ticket prices might not necessarily be a bad thing from the economic perspective.

Anyone with basic economic knowledge knows that in a competitive market, the decisive factor for prices is the relationship between supply and demand. There is a growth in demand for travelling by train during the Spring Festival peak period, so given the backdrop of limited railway resources, a reasonable price rise should give no cause for criticism.

If the price rise is in line with market competition, then excessive criticism will not help. What the public hates the most, however, is not the price rise itself, but the monopoly which allows a ¡°visible hand?to take control in the market. This means the role of the market in allocating resources has been weakened.

As long as the market has not played a decisive role in the price issue, ups and downs in prices are equally disturbing. If the price increase is indeed a result of the rules of the market economy, then it should be applauded. For the next step, new investors of various kinds should be allowed to enter into competition with existing operators within the railway industry, thus breaking the present monopoly.