A Study On The Market Opening And Government Control Of Chinese Petroleum Industry

With the process of Chinese reform and opening, the oil industry management system has made a great change, realized the transformation from highly centralized planned economic system to socialist market economic system. Oil industry market opening up gradually, from closed or semi-closed state to complete opening, the market operation mechanism initially formed. But being a product of planned economy, the initial market structure is formed by administrative order and resources appropriated, it is still lack of effective competition of operation mechanism. Meanwhile, the external interdependency of Chinese petroleum is rising continuately, and the economic development is increasing to depending and demanding for oil. With the competition of foreign successful oil companies, how to optimize Chinese oil industry management, improve oil industry market structure, enhances our country petroleum enterprise’s international competitiveness and oil resource allocation efficiency, and guaranteeing our country’s energy security, has become an urgent and vital problem. This dissertation is based on the relevant theory and practice of dynamic, the historical course of China’s economic system, the domestic oil industry development condition as well as the normative and empirical multi-level perspective, and is aim at to research the market opening, government control and adjustment of industrial organization of Chinese petroleum industry, it has strategic and realistic significance to our country petroleum industry development. Through the analysis, the dissertation finds that petroleum industry has natural monopoly characteristic, but overall it is unnatural monopoly. Competition appears with the economic characteristics of oil industry, which is the logical starting point of this research.Firstly, it research for market opening, government control and industrial organization adjustment of international petroleum industry. This dissertation analyzes the international petroleum industry’s history, current situation and the trend, and summarizes the foreign characteristic and experience of oil industry government regulation and the market opening. It plays an important role to guide China’s petroleum industry, and points out the direction of development. Petroleum resource management system is the main component of oil industry management system, the management modes can be divided into centralized management, relatively centralized management and decentralized management, and most of them are in centralized mode, where the management function of the government are generally strong. World petroleum industry system can be mainly divided into four types:the private dominated market of western oil producers, country dominated Western producers, country dominated developing countries, western non-oil producers countries to participate and the market dominant type. According to the relationship between government and the national oil company, petroleum resource management modes can be divided into not having National Petroleum Companies and petroleum resources are admistered by government agencies, having national oil companies but not involved in oil resource management, having National Petroleum Companies to assist the government to exercise authority, having national oil companies for oil resources management, having national oil companies to monopolize upstream petroleum industry. Many countries have adopted the government regulation in order to ensure the security of this strategic resource. Due to different historical period and different levels of development, regulation and market opening level is also different. By all these analysis we can find the main oil producing countries mostly have their own oil laws and regulations, and established relatively independent oil industry control structure in accordance with the laws and regulations. The pattern of world’s oil industry has changed from oligopoly to monopoly competition, and its form and subject of competition will be more variety and diversity, market monopoly is a noticeable trend.Secondly, it analyses the history and the present situation of Chinese country petroleum industry’s management system and operation mode, which helps us to understand the the historical period and the existing problems of China’s oil industry. It has been through four stages of management system reform and industrial organization adjustment in Chinese oil industry, All key points of previous reform and adjustment is to restruct the market structure of oil industry. In a certain degree they broke on monopoly and drawing into competition, the industry market is in gradually open in general. At present, China’s oil reserves overall shows ascendant trend, crude oil products of relatively slow growth, but with China’s crude oil and product processing ability, and crude runs, refined oil yield and crude oil imports’rapid growth, dependence of ratio on foreign oil continues to rise. At the same time, the oil consumption strengthened gradually, the national economic development calls for their products for oil demand to maintain a high growth rate; Based on calculation of China’s oil industry market concentration index, we found that Industrial structure has changed from administrative monopoly under planned management mechanism to Oligarch competition under market mechanism gradually; China’s oil industry still has relatively high barriers to entry, the market remains to be further open, and the resources allocation is improving but still in low efficiency, with administrative monopoly characteristics, and administrative monopoly caused the social welfare loss.Thirdly, it analyses the problems of government control in Chinese oil industry and describes the aim to oil industry market opening and adjustment of the government control. Since China’s reform and opening up, Chinese oil industry management system changed frequently, oil policy lacked of continuity and a complete legal framework; Decentralized management mode has resulted in lacking of unified oil industry management institution, standardized procedures and effective regulation means. What’s more, the limited government supervision has lead to an unsound petroleum industry supervision system. Under the background In China that oil industry still has administrative monopoly characteristics; the process of adjustment of government control is also the process of standardizing the government’s behavior. In order to improve the overall competitiveness of China’s oil industry, we need to increase the effective competition in the market as the key point, and foster a competitive market main body as the core, creating better policy environment for market main body to grow and optimizing the market structure of oil industry. Opening the oil market can also improve the domestic oil supplies, alleviate the contradiction between supply and demand of oil, and improve the social welfare.Finally, it suggested adjustment goals and approaches to China’s oil industry opening and government control. It provides decision-making suggestions for the reform of China’s oil industry, which is helpful to improve the level of the oil industry management, the competitive ability of enterprise, and is advantageous to our country’s market economy system consummation. We should adhere to the principles that the adjustment should accord with the national conditions, economic efficiency, interests of social and public, fair competition and plan as a whole when we conduct market opening and government control. This dissertation declares that management system should be improved, and industrial structure should be subdivided, deregulated properly. We need to establish an independent oil industry supervision mechanism, perfect the legal system of oil industry control, and to establish efficient price mechanism. And the goal of industrial organization structure optimization is to establish international relative guaranteed monopoly position oligarch market competition structure, not only external competition ability need to be improved, but also domestic effective competition need to be promoted. Monopoly competition market structure constructing can be divided into two steps. First of all, we should continue to increase national oil company’s restructuring efforts, actively open up in case of the effective competition situation, to speed up the marketization of oil industry. The main measure of constructing the market structure of monopolistic competition is to let go of barriers to entry, to introduce competition mechanism, to strengthen national oil company’s competition. We can also enhance China’s petroleum enterprise’s national competitiveness by optimizing enterprises’ market behavior.What’s more, market openness of Changqing oilfield is analysed as a case by this dissertation. Changqing oil field created a strong production power by opening up market, introducing the market competition mechanism and promoting the integration of resource. Changqing oilfield have achieved remarkable success and realized high level and high benefit in exploration, becoming the fastest developed in recent years in our country. This is the epitome of China’s oil industry open markets, which provided valuable reference for our country to develop industry control policy, to accelerate the market opening and industrial organization adjustment and to improve petroleum resources’development and utilization efficiency in our country.