China Industrial Organization Rationalization

Our country has since the very beginning emphsized the importance ofrestructing industries but ignored the adaptation of industrial organiztions. Since theend of1980s, we have adopted industrial policies for more than20years andimplemented a series of industrial policy documents. However, there were relativelyfew policies about industrial organization policies, which are mostly about formationof proper market structure. Industrial organizations are the foundation of industrialstructure, and proper arrangement of industrial organizations is beneficial tooptimations of relations in internal structure, paving the foundation for adaptation ofindustrial structure, accelerating the progress of upgrading industrial structure, andhaving partly resolved the conflicts of industrial structure. Therefore, industrialpolicies must accommodate the proper industrial organizaions. If we ignore theadoptation of industrial organizations and unduly emphazise the importance ofrescructuring industries, we may make the mistake of pursuing the trivivals andigoring the core materials. Manufacures, due to its contribution to whole economy,attracted most attention of industrial policies, and proper arrangement of industrialorganizatons constitutes the core of this paper.The first chapter proposes the reasons of focusing on better arrangement ofindustrical organizaions in manufacture sector. Manufacture plays the key role inwhole economy. Under the surface of manufacture prosperity lays multiple problems.Scholars ignored industrial organizations and its importance to whole economicdevelopment.The second chapter is about basic theories and bibliographies. Westernindustrial organization theories are the basis and source of research about industrialorganiztions in China. This chapter, firstly, describes the history of Westernindustrial organizations. Although there is no direct reseach on proper arrangementof industrial organizations in Western industrial organization theories, reseach onindustrial organization helped shape the ideas of free competition and industrialpolicies. Later on, this paper describs the research history of China’s industrialorganization rationalization and make brief comments on this research. The third chapter focuses on the temporal progresses of industrial policies andrationalization of industrial organizations in China. Firstly deliniating the history ofChina industrial organization, and then introdusing the history of China industrialorganization accompanied by intervention of industrial polies, this chapter points outthe reason why our industrial policies did not reach their goals is the lack ofindustrial organization policies or improper objectives of industrial organizationpolicies. Therefore, industrial policies should pay more attention on rationalizationof industrial organization.The fourth chapter is about meaning and scope of rationalization of industrialorganizations. Generally speaking, vague definition is the main obstacle to deep andthorough research. It then mentions theThe fifth chapter builds a critarion for proper industrial organizations. Basingon multi-dimentional criratia put forward in the previous chapter, this chapterproposes the appropriate principles of selecting a set of critaria for industrialorganizations, and builds a critaria including concentration, contribution rate ofaggregate asset and appearance index.The sixth chaper does the positive research on rationalization of industrialorganizations in China’s manufacture sector, and calculates respectively marketconcentration, aggregate asset contribution rate, appearance rate and its changes in30manufacture departments. This chapter finds inadequate rationalization ofindustrial organizations in China’s manufature. Some sectors may be approching therationalization of industrial organizations, but others are drifting away from therationalization.The seventh chapter explores the reasons for inadequate rationalization ofindustrial organizations in China’s manufature, which are property system withChina’s charateristics, local governments and industrial policies. The fundamentalreason is inadequate competition.The eighth chapter puts forward some policies targetted at inadequatecompetition in China’s manufature industrial organizations. We should not onlydeepen reforms and let the market play the key role, but also improve the status ofindustrial organization policies and let industrial organizaion policies play theirparts. Through normative analysis, this paper builds a research structure about therationalization of China’s industrial organizations. Through positive analysis, thispaper calculates the rationalization of industrial organizations in30China’smanufacture sectors. It finds inadequate industrial organizations rationalization atpresent China. Some sectors are approaching rationalization, but others are drifingaway from rationalization. The main results of this paper are as following:The first viewpoint is that industrial policy should pay attention to therationalization of industrial organization perspective. China’s industrial restructuringfor many years, results have been poor. The important reason is that one-sidedemphasis on industrial restructuring and ignored adjustment of industrialorganization. Resolve conflicts need to focus on the industrial structure of industrialorganization policies and promote the rationalization of industrial organization.The second is that it defines the concept of industrial organizationrationalization and builds a comprehensive criteria applied to industrial organizationrationalization. In cope with efficient competition, structuralism and efficientism,China’s criteria concerning industrial organization rationalization do not properlyaddress the issue at its core. This paper, basing on the new development in industrialorganization rationalization under the circumstance of economic globalization,proposes a set of criteria apprising industrial organization rationalization intri-dimentional of market stucture, economic efficiency, and industrialcompetitiveness globally. It also proposes a comprehensive star criteria according tomarket concentration, aggregate asset contribution and appearance index.The third result is the calculation and analysis on China’s manufactureindustrial organization according to this paper’s analysis structure. After studing onmarket concentration, aggregate asset contribution, and appearance index of China’s30manufacture sectors, this paper concludes that China’s industrial organizationrationalization is inadequate, except the tobacco sector. After analying specificsectors, this paper finds that only five sectors are approaching rationalization and25sectors are drifting away form rationalization. This problem is especially severe inblack metal smelting and planting sectors, though many “China enterprise500” areconcentrating on these sectors. They are demonstrating a dissappointted trend indecreasing concentration and net profit rate when faced with disadvantageous international competition.The last one is is that it proposes a system of industrial organization policyobjectives. It rises from three dimensions which are the market structure, economicperformance and international competitiveness. The industrial organization policyobjective system include encouraging the formation of "Oligopoly, medium andsmall enterprises symbiotic" relationship between competition and cooperation,improving economic performance industry, especially state-owned andstate-controlled industries, cultivating different levels of competitive advantage andimprove the international competitiveness of the industry.