Competition Mechanism Of China's HSR Passenger Transport Industry:

The development of High-Speed Rail(HSR)passenger transport in China not only helps to alleviate the shortage of railway transport capacity and share the pressure of domestic passenger transport,but also promotes economic and social development and ecological environmental protection.However,the implementation of SOE-led management system is a hidden danger affecting its sustainable development.Although this kind of system shows effective policy enforcement in the early stage of construction,the problems cause by its inflexible and inefficiency would gradually emerge in the operational phase after completion.If such a system fails to make changes in line with the times,HSR passenger transport enterprises would inevitably be unable to adapt to the market environment with increasingly fierce,especially in the case of enterprises in the transportation fields(eg.aviation and highways)have already gained greater autonomy in operation.The fundamental solution to the problem lies in the further improvement of the competition mechanism in the HSR passenger transport industry.It is generally believed that the main measure to improve the competition mechanism of HSR passenger transport industry is to introduce competition within the industry through structural reorganization(for example,by "separation of network and operation" and"geographical division"),and then through the SOE system reform and deregulation policies to enhance the operating autonomy of HSR passenger transport enterprises.This measure seems reasonable,but they have not noticed that the HSR passenger transport is actually in a "special"market environment:with the advantages of speed,comfort and punctuality,HSR not only faces the competition from roads(long-distance buses or private cars),but also fierce competition from aviation on a longer journey.This competitive environment provides a good market foundation for improving the competition mechanism of HSR passenger transport industry,and also raises new problems.For example,does the existence of competition from other modes of transportation means that there is no need to introduce competition within the industry?Whether the core of the current institutional problems is ambiguous in the nature and boundaries of SOE and improper regulatory policies that caused HSR enterprises cannot flexibly adapt to market competition,rather than the monopolistic nature of the industry itself?Based on the fact that HSR is facing competition from other transport modes on different itineraries,this paper constructs Multi-Industry-One-Market(MI-OM)paradigm that specifically analyzes how to establish and improve competition mechanisms in such market environments.Specifically,Chapter 2 of this paper build the MI-OM paradigm.Firstly,it clarifies the rationality and necessity of applying the MI-OM paradigm to investigate the competition mechanism HSR passenger transport.Then,according to the specific conditions of different transportation industries forming the same market on specific lines and the key factors of competition among various transportation modes,the game theory method is used to construct the theoretical model of MI-OM paradigm.Chapters 3 to Chapter 5 are the application parts of the MI-OM paradigm,in which the problem about how to improve the competitive mechanism of HSR passenger transport be discussed from three aspects:structural restructuring model,SOE organization,and regulation and competition policy applicationAccording to the theoretical analysis results of the MI-OM paradigm,for the HSR passenger transport industry that originally implemented "integration of network and operation",whether to introduce operational competition or implement geographical division under the structure of "integration of network and operation" and "separation of network and operation",the impact on the profit of related enterprises is uncertain(not necessarily improving the profitability of HSR enterprises),but the consumer surplus and total social welfare could be damaged.The main reason is that the introduction of competition in the HSR passenger transport industry in different forms could enhance the market power of HSR when competing with other modes of transport,and weaken competition between various modes of transport.In addition,the introduction of competition under the "integration of network and operation”structure is also prone to foreclosure effects.On the contrary,the level of social welfare is higher when the HSR passenger transport maintains "integration of network and operation" or implements a simple "separation of network and operation"(not introducing competition in the operational phase).Although the simple "separation of network and operation" will cause double monopoly,the competition constraints from other modes of transportation would alleviate the problem and its distorted results to some extent.At the level of SOE organization,the Chinese government has been committed to the corporate system reform of state-owned HSR passenger transport enterprises and the establishing corporate legal person status.This reform goal has also been supported by the analysis of the MI-OM paradigm.The implementation of the corporate system reform could not only improve the profitability of the HSR enterprises themselves,but also bring benefit to the operating status of other modes of transportation.In other words,the relatively lagging SOE reform of HSR passenger transport companies brings negative impact on other transportation sectors.More importantly,although the corporate system reform of HSR passenger transport enterprise could detrimental to consumer surplus,it can raise the level of social welfare.The reform of the company system for HSR passenger transport enterprise is undoubtedly correct in theory,but it is not easy to implement in practice.The state-owned HSR passenger transport enterprise has the dual characteristics of "publicity" and "enterprise",which determines that the reform of the company system needs to be divided into categories and advances in sequence.Reviewing the domestic and foreign reform process,it is found that the SOE organization form of HSR passengers basically follows the evolutionary law like "government enterprises(mainly pursuing publicity)? special corporations(both publicity and corporate-oriented)?joint-stock company(pursuing corporate-oriented).The results of theoretical model analysis also show that in the process of HSR passenger transport enterprises according to this law.Regulatory policies are another important aspect that limits the autonomy of HSR companies.In the context of the widespread competition between high-speed rail and other modes of transport,this policy arrangement has actually been inconsistent with the real market situation.According to the MI-OM paradigm,due to the competition constraints of other modes of transportation,deregulate for fare under the "integration of network and operation" or for access fee under the "separation of network and operation" would not lead to an unrestricted price increase.Although deregulation could damage consumer surplus,it will benefit the relevant corporate profits and total social welfare.This conclusion shows that the competition policy for the deregulation of HSR passenger transport and the promotion of competition between various modes of transport is superior to the regulation policy.The policy implications are mainly as follows:(1)It is feasible to maintain the "integration of network and operation" structure,or to implement a simple "separation of network and operation".Considering the SOE reform,the“1+1+N" mode could be adopted,that is,forming a national high railway network company,a national HSR operation company and several regional HSR operation companies.(2)The China Railway Corporation is in fact a special legal entity.The China National Railway Group Co.,Ltd.,which will be renamed is formally a joint-stock company,but it still has certain characteristics of a special legal entity for a certain period of time.The "Special Legal Person Law" should be enacted on the basis of the special provisions of the State-owned sole proprietorship in the Railway Law and the Company Law to regulate such enterprises.In the future,on the basis of the implementation of "1+1+N" mode,the HSR operation company could take the lead in completing the transformation of the joint-stock company,while the HSR network company temporarily exists in the form of a special legal entity,and then implement the transformation of the joint-stock company when the time is ripe.(3)Gradually liberalized the price of HSR enterprises.According to the relevant policies formulated by the National Development and Reform Commission,the pricing power of some HSR lines has been liberalized,this could be further promoted in the future based on the specific market conditions.Meanwhile,it should be noted that the process of implementing corporate restructuring and deregulation is also a process of gradually applying competition policy.The application of Article 7 of China's Anti-Monopoly Law on SOE needs to be refined.The specific recommendations are:The Anti-Monopoly Law completely exempts government enterprises,exempts special corporations as appropriate,and is fully applicable to joint-stock companies.There are still some shortcomings in the theoretical model constructed in the MI-OM paradigm.For example,how to incorporate the economic externalities of HSR into the decision maker's objective function,how to describe the dynamic changes of market forces in various modes of transportation with the travel distance.These issues need to be further broken in future research.In addition,due to the low availability of HSR passengers transport,it is expected that there will be sufficient data and empirical research to test the credibility of these conclusions or to make corrections.