The Study Of Chinese Weak Natural Monopoly Industries' Performance Evaluation

According to traditional theories, due to great asset specificity, there is strong natural monopoly in industries like telecom, electric power, aviation and railway transportation. These industries are not suitable for competition, and should operate under government monopoly management and regulation. So in China, natural monopoly becomes the main excuse of these industries for refusing marketing reform and maintaining monopoly benefits. But overseas successful reform in similar industries and practice of 20 years reform in China proved that through technology advancement and management innovation, the so-called natural monopoly characteristic of these industries cannot be barrier to open market competition. Therefore these industries are not strong natural monopoly industries that cannot be put into market competition. But belong to weak natural monopoly industries, that is, their entry barriers mainly are caused by government administrative control. Once administrative control is cancelled, these industries will be competitive industries. In fact, monopoly breaking and market competition is the main development trend of natural monopoly industries.Since the reform, there have been long term and large-scale reform in Chinese weak monopoly industries such as telecom, electric power, aviation and railway transportation. Original intention of reform was to improve performance of the whole industry. So industry performance is a main index of evaluating the result of reform in these industries. According to definition in economics of regulation and antitrust, comprehensive industry economic achievements can be evaluated by resources deployment efficiency and technology advancement rate. This thesis calculated resources deployment efficiency and technology advancement rate of Chinese main weak natural monopoly industries with Tullock model and factor analytic method, and calculated the change of TFP index based on non-parameter Malmquist index method, which is a main representative index of technology advancement rate. Then calculated comprehensive economic achievements of these industries with SE-DEA model. Empirical analysis result shows that the reform of Chinese weak monopoly industries is successful as a whole. Reform improved performance of these industries continuously. It is technology advancement that improved performances of these industries, but not increased resources input. Crosswise contrast showed that performance of more perfect competitive industries such as telecom improves faster, while performance of industries with too much administrative protection and reform slowly such as railway transportation also improves very slowly.Since the competitive power of Chinese weak natural monopoly industries is very weak and oncoming opening date of monopoly industries to foreign investments, these industries cannot develop as the way of western country, which is opening regulation, with explosion quantity of enterprises, merger and reorganization, and then become oligopoly. The competition cost is too high, and it will take a long time. According to competitive market theory, which is the newest achievement in industrial economics, there is no certainly inverse relation between the overall performance of an industry and quantity of firms. If the entry barriers are low enough, capital outside the industry can enter freely at any time. Even if there is only one firm in an industry, potential competition will also force this firm acts as in perfect competitive market and cannot exercises its monopoly power. So monopoly firm will improve performance, social welfare will increase and resources waste caused by blind competition when too many firm enter an industry can be avoided only if our government relaxes regulation on weak natural monopoly industry, and supports recently entered firm.