Natural Monopoly Regulation And Relax - The Study Of Institutional Change Of The Water Industry In China

From the economic view, tap water has a very imporxtant role in the production and living of city people. As natural monopoly industry, on the one hand, tap water industry has the distinguishing features: network motion, precipitating cost, public good, subadditivity, and externality. Objectively, it demands government regulation in order to over come die market invalidity. On die other hand, it is possible to use the competition principles because there are the regional boundary of market meaning, the difference of service level quality, and the personality of products used in tap water industry. The coexistence of regulation and market competition requires efficiency of both regulation and enterprise moving efficiency. According to regulation requirement, generally, four goals must be gotten, the first is the efficiency of resource disposed, the second is the efficiency of enterprise production, the third is the rights of customers, the fourth is environmental protection. But in real regulation, efficient regulation is often replaced by invalid regulation. In our country, regulation institution has changed from planning model to market model as the planning economy has been turned to the market economy.How is the regulation efficiency in this historical changing? My paper discusses it from the following four points:1, Regulation organizations and their reformation. This paper mainly analyzes the features and efficiency of regulation organization, the relationship between regulation organization and the department of government, and points out that the efficiency of regulation organization is low due to the subject regulation cut apart.2, The analysis of the regulation measures. The paper studies the water resource regulation and water price regulation. It analyzes the problems of theory and reality existing in the rights of possessing, using, profit, disposing of water resource. And It shows that the different arrangement of the ownership of water resource influences resolving the problem of the trade of water rights, the charge of water resource the different arrangement of the ownership of water resource and water resource protection.Under the present regulation system of water price in our country, the goal of government regulation is to overcome the malpractice caused by monopoly in this industry. But in real action, government regulation strengthens the monopoly role of water industry, and causes the low efficiency of the enterprise.3, It is an effective way to overcome die invalid regulation in our country to learn from the regulation of water resource and water price in the foreign countries, where the water rights is clear, the water price is set according to the market4, Aiming at roe invalid regulation, the paper analyzes the main canes from the views of the institution economics.The conclusion of my paper is that we must regulate the relationship among the regulation organization, government organization and the subject regulated in order to introduce Die incentive regulationmeasures and loosen the regulation towards tap water industry.