A Study On Incentive Regulation Pattern Of Natural Monopoly Industry Of China

As a special industry, natural monopoly industry plays an important role in national economy of all countries. Therefore, it is regulated by government in different degree and way, and China is no exception. But in view of present regulation conditions of our country, there are four main problems: vague status of regulator, unreasonable regulation method, low efficiency of enterprises regulated, and lack of perfect regulation law. Meanwhile they also restrict improvement of whole performance of main natural monopoly industries in our country. So how to improve the present performance of those industries by reforming traditional regulation system, has become a thorny problem.As a result of this, the article establishes incentive regulation pattern of natural monopoly industry of China. The aim of the pattern is workable competition, and there are four links closely related to support and cooperate with it. The four links are regulation method, regulator, enterprises regulated, and regulation law, which in turn are key, subject, object, and law environment. As for workable competition, it means not only making full use of scale economies of the industry, but also increasing competition to give consideration to both advantages. And performance including economic performance, technological performance, and allocation performance of resource, can be standard to measure the aim. As for regulation method, it is the key of the pattern. Therefore, it is one part which is discussed and analyzed emphatically. First, the article describes incentive regulation model of government under asymmetric information generally by means of basic principle of principal-agent model of information economics. Second, on basis of that, it establishes incentive regulation model of government under asymmetric cost information. Finally, according to conclusions of the model and price cap regulation model, the article tries to design price regulation model of natural monopoly industry in China, and adjusts original entry regulation in the light of property of different transactions. As for regulator, when setting regulation organizations, it should abide by principle of independence, law-governing, concentration, and publicity to separate government from enterprise, to set formulating and executive organizations of regulation policy, and to found specific committees of those industries among National People's Congress in order to monitor action of regulation organizations effectively. As for enterprises regulated, it is a must to advance reform of property right system of state-owned enterprises around shareholding system reform, and standardize corporate governance structure. As for regulation law, it is necessary to make anti-monopoly law adapting to present regulation conditions of our country, and to perfect and make specific natural monopoly industry laws as soon as possible.In one word, incentive regulation pattern of natural monopoly industry of our country is an organic entirety, whose basic purpose is to supply enough incentive to enterprises regulated with reasonable regulation method, to impel them to carry on technological and managerial innovation, and to reduce costs continuously and increase productive efficiency and profit. At last it can improve performance of the whole industry and realize workable competition.