China has been highly successful in electrifying rural areas in the past half century. Institutional structure and its reform are important for investment and, therefore, development of rural electrification. Over time, there have been three major institutional changes initiated by the central government; When the People's Republic was founded in 1949, it was short of capital, technology and management professionals to promote rural electrification, so rural electricity had a separate administrative system from the urban areas.
From 1949 to 1977, China established a comprehensive vertical system of rural electricity administration under strict central planning. At the end of the 1970s, with the adoption of economic reform policy, the central government handed over the management of the local electricity system to local government. County level has proved the most effective implementation unit for both planning and project implementation of the rural electricity system. From 1998 to 2002, the central government has been separating local electricity supply from local governments to facilitate the commercial operation of the utility market. After 2002, the rural electricity system was merged with the urban system, forming an integrated national electricity administrative system in China.