On The Development Of Salt Industry Under The Government Regulation

Salt is the basis for human survival like water and air. It is the indispensable element to maintain the normal operation of the human body and many other life functions within the body of, if the body is not a certain amount of daily intake of salt, there will be limb weakness of the phenomenon, the passage of time, life will be threatened. Therefore, the salt was given "Taste progenitor", "eat meat dish of the will", "Great Treasure of the Country " and other titles, It can show the importance of salt. At the same time, precisely salt is an indispensable element of human survival, so the salt is always accompanied every step of human development. Set of early human settlements and cities have a close relationship with the salt; Early human warfare also stemmed from Contention and control for salt which was such an important resources; Salt was closely related with the regime change and social stability, in feudal society, Salt is one of the three pillars of state revenue, so it was said "In a country’s fiscal revenues, the salt was accounted for half of it". Into the modern society, the economic value of salt was gradually developed, it became an important industrial raw material, and with iron, oil, limestone, sulfur, together they are called the five industrial raw materials. Today, there are over 14,000 kinds of salt products. Its production, consumption and use are one of the signs that reflected the level of a country’s industrial development.Salt production in China is huge. The annual salt production reached sixty-six million tons, ranking first in the world. The capacity of salt production has reached seventy-two million tons. China’s salt production is mainly from sea salt, well salt and lake salt. Among them, sea salt is the bulk, accounting for more than a third of the world’s salt production.China’s salt industry regulation is very distinctive:Firstly, China adopts salt monopoly system. Salt monopoly system play an important role in the elimination of iodine deficiency disorders and improved the quality of National in China, but the disadvantages are gradually revealed. The salt monopoly system will take salt and "small industrial salt" into the franchise area, forming a dual market structure which contains "small salt water" and the coexistence of large-scale industrial salt. The division of salt production and sales and the salt business which was divided into two types of abnormal salt manufacturers that were the salt distribution companies and enterprises can only produce hindered the company’s business and Salt development. With the monopoly position. Salt companies indirectly raised the retail price of salt. which hindered the effect of prevention for iodine deficiency disorders in these areas. Secondly, excessive government regulation led to serious regional monopolies in China’s salt industry. The regional monopolies of salt industry hindered adjustment of the salt production, and made unqualified, non-compliance of the private mini-salt exist for a long time. Thirdly, the salt company’s state-owned structure not only made salt market lead to a vicious price competition, but also provided a platform for administrative monopoly of the salt industry. Moreover, the state-owned enterprises also become the Chief salt monopoly platform. As the Inconsistent of maximum benefits of salt business operators and maximum benefits of the salt business and the uncertainty of "the people" who owned state-owned enterprises, it can not provide strong oversight, the state-owned enterprises generally compete to lower prices for short-term interests, which resulting in the price of salt is less than their marginal product cost and leading to vicious competition in the industry which is continued to spread.Government’s salt monopoly system, long-standing of regional monopoly and the set of the property market structure of state-owned property hinder the optimization of salt market, lead to adverse salt market structure and vicious market behavior, and ultimately make our business a long period of salt scattered, weak situation, there are range of issues such as salt market structure deformities, frequent vicious price competition, mergers little effect, low economies of scale and scope economies, which reduce the competitiveness of salt business in the international market.This article will take reform and development of salt as a research object, using the following methodology. Firstly, the research based on a comprehensive of multi-disciplinary and cross-cutting. Which specifically related to economic theory, management theory, law, public administration, political science and administrative science and other disciplines and based on comprehensive knowledge of a variety of subject areas; secondly, the method of combination of the theory and practice. Through basic theoretical research in this area, combined with our government regulation of the specific status of salt, it is specific and practical significance to study and analyze the salt regulatory reform; thirdly, the comparative analysis. Through the horizontal comparison and analysis of rest of the world’s salt market structure, visiting other countries’ regulatory experience and lessons, it is good for the reform of China’s salt industry regulatory practice; fourthly, the combination of abstract and concrete. It is better to reveal the nature of things from the abstract to the specific research methods. To investigate the problems of development of salt business with the perspective of regulate, and hope that the study findings could make some contribution to the development of salt reforms.This paper that based on the theory of regulation combs on Domestic and foreign literature of salt regulation and industry regulation, and has been systematically studied reform and development of China’s salt industry.Text is divided into four parts:the first part, including articles in Chapter 2, focuses on the origin of the monopoly theory and regulation theory, the definition of regulation, classification, and the process of regulatory and other basic’theory for the article for making a theoretical groundwork for follow-up content of the article; second part, which is chapter 3 of the article, not only detailed overview of the development of our salt business, such as the distribution of resources, the capacity of China’s salt industry’s production, technology infrastructure and other issues, but also highlights the institutional foundation of China’s salt industry rules--salt monopoly system, as well as the organizational foundation-the settings of China’s salt company; the third part, which is the article’s two chapters 4 and 5. In Chapter 4 it describes that there are many problems such as sales out of touch, frequent vicious price competition, the effect of corporate mergers is not obvious and other issues in the salt market in China, and gives a brief analysis of the causes of these problems from the regulatory point of view. Chapter 5 analyzes the main existence problem of the salt market in China, including scattered, weak, low market concentration of China’s salt market players, scale economies and scope economies are not obvious, and salt corporate mergers is limited by the salt monopoly system, monopoly of the regional, state-owned property as well as many restrictions, on this basis, it analyzes the main objective of China’s salt industry reform, which including changing the scattered and weak status quo of salt market players, and improving the concentration of salt market, changing the type of structure of salt industry market, turning "low intensive" market structure into a "oligopolies" market structure in the salt industry in China, it proposes gradual reform of market structure changes in salt business, and establishes medium-term objectives and the ultimate goal changes in salt market structure:the fourth part of the article, including chapter 6.7and8. As the mergers of salt business is limited by the salt monopoly system, the regional monopoly, many restrictions of the state-owned property, it is unable to complete the expansion of enterprise scale and the optimization and growth of the main salt market, it will not highlight scope economies and scale economies of China’s salt industry. Therefore, for achieving changes in the structure of China’s salt market, highlighting scope economies and scale economies of China’s salt industry, the first thing will start the reform of the salt monopoly system, the regional monopoly and state-owned property. Chapter 6 of the article discusses the objective environment of the reform of China’s salt monopoly system in detail, and further proposes strategy steps and measures of salt monopoly system reform. Chapter 7 discusses the performance and causes of China’s regional administrative monopoly, and analyzes the costs and benefits of regional monopolies with the use of economic approach, and then presents a regional monopolies reform measures, including institutional reform and legal construction. Chapter 8 discusses reform of state-owned property in China’s salt industry, indicates the reform objectives that is "the state advances as the private sector retreats", and discusses its meaning and necessity, and summed up the effective path to achieve this goal.The innovation of this articles reflects in the following aspects:First, it analyzes the regulation of China’s salt industry with the extensive use of regulation theory, mainly analyzing development constraints on the role of salt business in China with the affect of the salt monopoly system, regional monopolies and state-owned property, and it proposes the way and targets of the reform of China’s salt business in accordance with relevant theory. It has both theoretical depth and practical significance as reference; Second, it proposes regulatory reform of China’s salt industry should aim to establish an oligopoly market, and discussed the necessity of an oligopoly by comparing the rest of the world’s oligopolistic industries, at the same time. I believe that it is a long-term process of China’s salt industry reform, it requires getting rid of a variety of obstacles, on this basis, it proposes to achieve oligopolistic market structure program step by step, which is a strategic thinking that it focuses on the implementation of oligopoly market structure first, and then makes it into development of high oligopoly type of market structure, Third, in the objectives of salt monopoly system reform, it proposes reform ideas of taking care of "poor and remote" areas, which fully reflects fair and the ideas of taking care of vulnerable groups, and it puts forward the reform ideas with a certain degree of innovation in accordance with different situations in different parts.Of course, this paper is not enough thorough research in the part of problem of regulatory reform of the salt business, for example, salt business reform how to promote the performance of salt market, and the what extent that improves market performance, achieves the healthy development of salt industry, and enhances our salt prices competitive. This is the future course of the studying areas for further studying.