Abuse Of Administrative License And Regulation

Shanxi's policies concerning coal-mining industry reveal a prevailing phenomenon in China, which is in Chinese GUOJINMINTUI, meaning re-socialization of industries of'strategic significance'. In this process, state-owned and state-controlled enterprises (SOE) were given tremendous advantages in Merge & Acquisition, even at the expense of due process and just compensation.Interest groups involved include giant SOE, private enterprises and their shareholders, workers therein, and habitants in the vicinity. In this GAME, the industry policy puts high priority to increasing concentration of productivity of big corporations, in the name of safeguarding the workers'health and life, which failed after many successive influential accidents in SOEs during 2009.The regulator employed the administrative licenses as entry of mining industry, in which all the enterprises have to meet high standards in techniques. As a result, most private enterprises were squeezed out and the coal-mining industry is dominated by SOEs in Shanxi. The least-used option, nationalization, through the regulatory impact analysis, distorts competition and mismatches the regulatory objectives.The statistics and analyses prove a fact of re-socialization, which is always denied by regulators. The tax distribution mechanisms between the Central government and regional play a great role in the policy-making, and the incentives and punishments, namely the political interests of the bureaucracy exerted by Central government, also interacted in it.In this re-socializing campaign, policy continuity and predictability, Vertrauenschutz (protection of expectation interests), and procedural justice were left behind. More participatory democracy needs be called for into the decision-making process, cost-benefit analysis to assessing the necessity and rationality of regulatory policy, and procedural legality to guaranteeing possibilities of dialog between interested groups.