On China's Petroleum Industrial Organization

The term Industrial Organization refers to the relations among enterprises within one industry. The core issue of industrial organization is the relation between monopoly and competition. The goal of optimizing industrial organization, which is foundation of industrial organization theory, is to realize effective competition of the industry. A lot of studies delicate that the relations among structure, conduct and performance, as a major factor of optimizing industrial organization, is very important to making decisions on entry-and-exit, restructure, scale economy and price in certain industry.Market structure of China's petroleum industry has some distinct characters. On the industry level, administration is geographically divided and operation is monopolistic; on the enterprise level, concentration is low and scale non-economy exists. Meanwhile, high entry barriers hinder other competitors from participating in market competition, resulting in poor efficiency of the industry. The market structure of whole petroleum industry demands restructuring and integrating.Market conduct of an enterprise holding dominant position in the market refers to its behaviors to deal with its competitors and adapt itself to market surroundings for maximizing its profit. China's petroleum enterprises have been experiencing market-oriented reform for more than years. Because of the inertia! effect of planning economic system, however, the market conduct of China's petroleum enterprises has a strong characteristic of "transitional period", which leads to lack of the ability of enterprises' self-organization and highly governmental regulation. In terms of both price determining and organization adjusting, there exist excessive government regulation and little ability of enterprises' self-organization, which results in uncertainty of market performance.As a goal pattern of optimizing industrial organization, effective competition is a comprehensive description of relation between monopoly and competition among enterprises, which is a comprehensive understanding of market structure, market conduct and market performance. This dissertation holds, according to industrial organization theory, and in the light of the features and status quo of China's petroleum industry, that the definition of optimizing industrial organizational implies the behavioral goals of government and enterprises and that the behavioral equilibrium of government and enterprises is the realization of the goal of optimizing petroleum industrial organization. Particularly speaking, the goal pattern of optimizing China's petroleum industrialorganization is as following. Firstly, from the view of market structure, the market is oligopoly with scale economy and competition. Secondly, from the view of market conduct, the government can exercise effective regulation by laws and rules, while enterprises have sufficient ability of self-organization. The organic integrating of government's effective regulation and enterprises' self-organization is the goal of optimizing market conduct. Thirdly, from the view of market performance, the allocation of resources will reach the optimism and the international competitive ability will be strengthened.According to the SCP theory, market structure determines market conduct and market conduct in turn affects market performance. Therefore, optimizing China's petroleum industrial organization should begin with market structure. Effective competition is the basic feature of effective market structure and a criterion for assessing market structure. Through comparative analyses of four market structures, we reach a conclusion that oligopoly is a market structure that has a minimized deviation from effective competition. The market structure of international petroleum industry is largely oligopoly. With oligopoly petroleum industry could reach scale economy, guarantee the governmental effective regulation and promote the ability of technology innovation. There are four patterns of oligopoly market structure for option, and the...