State salt companies in Mainland China continue to monopolize the salt industry, according to a recent report by The Ming Pao Daily, allowing these state-run companies to conduct illegal business in order to increase profits.

A decree issued on July 1, 2003, gave the State Council the right to directly adjust the factory and trade prices in order to consolidate the salt monopoly system. The wholesale pricing of salt is now subject to mandatory planning by the state, and has been completely closed to private investment. In the past year, state salt companies have expanded their areas of monopoly to include salts used in dyes, leather-making and ice, further handicapping the factories.

Competition over salt runs deep in Chinese history and culture – it was the material used to make ancient Chinese coins. Thousands of years ago, the Ba, Chu and Qin people fought long wars over the rich reservoir of salt in the Three Gorges area. The Ba Kingdom that emerged in China’s Sichuan-Chongqing area was founded on salt production. Archaeologists in the Three Gorges area have found coarse earthenware cups made by primitive people to boil brine into salt, and assembly halls still stand from the days when Hubei and Jianxi businessmen came to Daning, one of the most famous salt producers in the Three Gorges area.

Today, factories in Chongqing, Hubei, Jianxi and other areas must secretly pay the state-run salt companies before carrying out the plans for the upcoming year’s production, according to the South Metropolis Paper.

Salt companies serve as both operator and supervisor, which allows the manipulation of profits and public demand of money from factories.

The report quotes a Chinese scholar who believes that in the salt industry, politics and business aren’t adequately divided, and this problem has been a longstanding barrier to the needed reform in the salt industry.

Information from the Central News Agency was used in this report