An Analysis Of The Efficiency And The Reform Path Of Economic Regulation In China: Private Investment As An Example

Government regulatory transformation is regarded as a tide of nowadays world economics. Essentially, regulation is special public goods and also a formal institution. Regulation in used by government to correct malfunction in market mechanism. The main function of regulation is to enhance the effect of market to cofigurate resource and to reallocate income. The market is not perfect and the government is not omnipotent. If the regulation of government (or government officials) seriously malfunctions the regulation efficiency maybe even lower than that of market. Therefore, through what kind of system to restrict the regulators is important question to keep market efficient. Economic regulations in China evolved from under the high concentrated planned economy system. The regulations were gradually relaxed along with the reform and open to the world policy. But as a result of the transforming economy characteristic, regulation in China is different from the western traditional regulatory theory. Efficient regulation must be carried out in virtue of all kinds of policies and stipulations. And the validity of regulation must be examined by market. Because regulation is government behavior, it's difficult to be quantified. Thus papers on regulation are usually literal described. This paper takes the folk investment as an example. Under a model of capital circulation and investment regulation, this paper analyses the validity of investment regulation by demonstration. This paper draws the conclusion that investment regulation in China remains low efficient. The low efficient investment regulation in China lies in the special institutional background. The importance is to formulate correct regulations policy that suits the Chinese national condition. Based on the reforming economical characteristic this paper gives detailed analysis on the path of regulatory reform as well as the importance to formulate effective regulation policy that conforms to the national condition.The paper is divided into four parts. In part one, we firstly definite the basic concept and the essence of regulation and economic regulation. Then, a theory is given to show the reason why regulation is of low-efficiency. In part two, based on the analysis of the actuality of economic regulation in China, we study the efficiency of the economic regulation in China. In part three, under the Chinese special system background the paper analyses the reason why regulation especially the folk investment regulation is of low efficiency. Finally, the paper concludes that regulation reform in China should pay equal attention to relaxation and strengthen. Concrete proposal also be put forward.