Legislative Issues On Railroad Institutional Reform

In China, at the heels of telecom and electric power industries, the reform of railroad is becoming one of the hot spots that attract public attention. Due to the current management system which has no clear line between the parts played by the government and enterprises, the undergoing investment system which has simplistic investors and lacks restrictions of investment risk, and the existing problems such as a strict market access and a rigid control of price, the development of railroad industry hardly fulfills the requirement of the economic and social development, and it even becomes a threshold that barricades economy. Therefore, an institutional reform in railroad industry is rather urgent.Facing a different market environment, a different institutional background, and different technological conditions, it is impossible for China's railroad industry to simply copy the mentality and the pattern of conforming and reorganizing in the reforms of telecom and civil aviation. Premised on the common rule, a thorough comparison of features of various industries should be carried so as to capture the nature and economic features of railroad industry, and hence its reform pattern which will take both the national background and unique road situation into consideration. A reform of slackening rules, and introducing competition has been earlier implemented in western countries. Whatever pattern is adopted, it should apply to the specific situation of the country, and adjust to various changes. For China's different national background, a clone of pattern from other countries is impractical; however, a comparison and reference, which helps to explore the common features, is beneficial and can be deemed as the encouraging way.The legal passage of China's railroad reform is mainly manifested in the following aspects: First, the role that the government plays in the institutional reform should be a separation of rights in management and in operation. The function of the government should be defined in terms of the multiple legal roles it plays. Second, corporate system is the goal of reform for the state-owned railroad industry. With establishment of a modern enterprise system, the state-owned railroad industry is to virtually become an economic subject that performs an independent and self-reliant activity in market competition. The competition will help the industry optimize the relocation of resources, enhance the efficiency, and engineer the development of national economy. Third, the transformation of investment system lies in a separation...