China's Civil Aviation Industry And Government Regulatory Reform Study

The government regulatory reform in monopoly industries has become an important issue throughout the world and an even more urgent task for Chinese government to push forward the economic structural reforms. The government regulatory reform of airline industry (AI) as a traditional natural monopoly industry is regarded as a typical case in many countries' regulatory reform systems. In the past 10 years, research on the industries that have network effects and regulation of these industries are considered as forward position in Industrial Organization (IO) Theory. This also made the study on regulation of AI a newly challenge to be dealt with because the AI has remarkable economic features of network, scale and scope.This dissertation focuses on the regulatory reforms in China's airline industry (CAI). It discloses the basic economic causes that push forward reforms of regulatory system in AI and further explains the specialties of China's reform in this field. By empirical analysis from the angle of Industrial Organization Theory, this thesis points out that there are interactions between government regulatory reforms and organizational changes on the industry. Furthermore, it gives some suggestions such as thinking and measures to deepen the regulatory reforms in the future. The author thinks that the regulatory reforms hi China's AI is a complicated system, whose mainline is to decline economic regulation while to strengthen the social one, in addition to taking reregulatory measures in other fields (for example, the government begins to restrict the airline in controlling the sale channels through computer system, etc). The rules of regulatory reforms in AI are as follows: to deregulate the fields where market competitive mechanism can work well and to regulate the fields where market mechanism cannot operate properly, meanwhile, to improve the traditional regulatory methods. In all, incentive and negotiated regulation as well as self-regulation are three good approaches to improve the efficiency of regulation.This dissertation consists of four aspects. Firstly, the author considered that the monopolistic or competitive nature of an industry was the basic cause that government reformed its regulatory system. From standard points, government should regulate a natural monopoly industry and deregulate a relatively competitive industry. It is well known that the nature of AI has been dynamically changed from natural monopoly to competition on market structure because of the following basic economical properties--economies of network, economies of scale and economies of scope, which affectdemand-supply structure and further determine the nature (monopoly or competition) of this industry. Thus the thesis explained why government regulatory reformsoccurred rationally.Secondly, this dissertation analyzed the regulatory reforms of China's airline industry based on two facts: one is the transition from planning economy to market economy, the other is the economic development of our country. The author established a theoretical model of regulatory reforms in CAI on the base of the above two facts and took the regulatory system reforms as an endogenous variable in the industrial development equation.Thirdly, this thesis overcame the defects of traditional definition for Government Regulation, it brought the restrictive regulation and incentive regulation coordinately in the same conception and emphasized the interaction between regulatory reforms and industrial organizational evolution. In bilateral reaction perspectives, this dissertation theoretically and empirically explains the regulatory reforms of CAI. It means that government regulation systems and the industrial organizational positions ought to be coordinated to each other, which provide a new angle of view to study the government regulation and its reforms.Lastly, the dissertation gave some suggestions to deepen the reform of regulation and to form the framework of regulatory institutions as well as policies. Six measures are; mentioned as follow...