Administrative Monopoly, Deregulation And Industry Performance

Many domestic scholars considered generally that crude oil mining industry is a natural monopoly industry. It consequently indulges the governmental administrative regulation. Artificial entry barrier exists reasonably for the reason that petroleum is strategy resource, the scale economy of oil exploration and the oligarch structure of the crude oil mining industry.This paper distinguishes the meaning between natural monopoly and administrative monopoly, then defines the characteristic of the crude oil mining industry, that is competitive but not natural monopoly, and rectifies the misunderstanding of some domestic scholars, pointing out that under the misunderstanding the monopoly structure of China's crude oil mining industry is administrative monopoly rather than free market competition, and the market performance reveals that administrative monopoly does harm to the competitive industry.To further testify the necessary and initiative of deregulation, this paper first define the recessive deregulation of the crude oil mining industry of China in 1998, then takes a positive test on the deregulation effectiveness using an econometric model, and confirms that deregulation improves China's crude oil mining industry not only in principle but also in practice. At the same time, the cases both domestic and abroad also prove that deregulation is good for the development of competitive industries. Finally, based on the analysis for the full text, this paper puts forward some corresponding policy recommendations.