One tool that has proven effective in many countries for delivering energy efficiency, but has not yet been widely adopted in China, is demand-side management, or DSM. As China restructures its electric utility industry, it has an important opportunity to develop power market rules and regulatory structures that would make DSM profitable for utilities or independent DSM program administrators, provide adequate funding and permit demand-side resources to compete with new generation in the marketplace.

US-based Natural Resources Defense Council and China's State Power Economic Research Center and Energy Research Institute jointly released a report summarizing the benefits of DSM for China, exploring China's experience to date in developing DSM policies and programs, analyzing the main structural, financial and regulatory barriers to further implementation, and recommending a number of policies and strategies for overcoming these barriers. (October 2003)