A Study On The Reform Of Chinese Railway Industry's Regulation System

In China, at the heels of telecom and electric power industries, the reform of railway is becoming one of the hot spots that attract public attention. This article is a very relative research about it in the perspective of government regulation.Refer to railway, the most impressive problems are its low efficiency and insufficient supply. As for this, I think the long time strict regulation on railway is the intrinsic reason. Therefore, the reform should be a thorough one that starts from railway's whole regulation system , includes access regulation, investment regulation, price and income distribution regulation, etc. Following this way, the article studies the problems exist in railway regulation system firstly, and tries to find the reasons behind them, then, based on the experience of some foreign countries' railway reforms, the article puts forward its own reform scheme.There are five sections in this article. The first section is a systematic description about China's railway regulation system. It includes four aspects, they are access regulation, investment regulation, price/income distribution regulation, and the framework of the whole regulation system. Through the description, we can find a obvious planned economy character in China's railway regulation system. For example, the administratively monopolized access regulation that caused the upper section (railway network operation) and lower section (the transportation businesses) integrated; the relatively closed investment mechanism that at first mainly depended on government allocation, then mainly relied on railway's building fund; the price regulation that controls the right of price setting strictly and keeps a low price level for a long time; the income distribution regulation that with its income and expense carried out in two separate ways; finally, the regulation framework that with the roles wrongly arranged and with inadequate supervision and lagged legislation.The second section lists four problems exist in China's railway regulation system in a normative perspective. Firstly, the integrated government and enterprise combined with monopolized operation has weakened railway enterprises' compete capability. Especially as those substitute transport methods, such as airline and highway growing rapidly, railway's compete capability is waning and its market share is shrinking day by day. Secondly, the relatively closed investment mechanism has hindered the development of railway seriously. Since the seventh five-year plan about economic and social development, because of the shabby investment mechanism, Chinese government hasn't taken its own responsibility in railway building. At the same time, the private investment was not adequate too. All of these have resulted in the insufficient and low-quality supply of railway. Besides this, the geographical distribution of railway is not reasonable as well. Thirdly, the rigid price and income distribution mechanism has retarded the improvement of railway enterprises' operation efficiency. Government's strict control on the right of price setting, and the planned distribution of income, combined with unreasonable method of price forming and weak supervision on extra fees collecting, have caused low efficient in railway industry. Since 1993, railway as a whole has lost successively for five years. Finally, asymmetric organizational framework of regulation has invalided the railway regulation seriously. The Railway Ministry takes several roles at the same time. It's not only referee, but also game player. Besides this, the supervision is inadequate, and the legislation process is lagged. All of these characters of the regulation system, to some degree, form a important cause which have resulted in the unreasonable regulation system.Based on the analysis above, at the end of this section, the article points out that the four goals of average regulation system, eg, allocate resources efficiently, ensure efficient operation of the regulated enterprise, avoid redistribution of income, and stabiliz...