The Basic Thoughts And Solutions For The Reform Of Natural Monopolies In China

Natural Monopolies, such as Electricity,Gas,Water and Public communications, areessential to everybody's daily life. However many problems arise from the running of theseNatural Monopolies in China.Today, there are many criticisms of how these resources are being run. There are threemain problems which centre on government's triple role which hinge on the fact thatgovernment and enterprise are not separated. Firstly, It is the representative of State PropertyOwnership;Secondly, It is the administrator of the industry;Finally, It is the direct managerof the enterprises. Moreover, the cost of government regulation is very high. The efficientrunning of the enterprises is very low. There is a lack of transparency within the regulatorysystem. There is the lack of an antitrust organisation. The mechanisms for price regulation arenot reasonable. The capture theory of regulation in government is an outstanding problem.The 16th CPC has put forward a plan for the reform of these Natural Monopolies. In 2001China entered the WTO which has opened up the Chinese market to increased competition.As the Natural Monopolies are the base upon which the rest of the economy is based, theeconomic efficiency of the whole economy is dependent on resolving the existing problems inthe Natural Monopolies.It is both important and necessary to undertake the research on the basic thoughts andsolutions to the reform of the Natural Monopolies. This thesis therefore falls into four majorsections:1. Presents the definition and characteristics of Natural Monopolies .Then points out thestrategic meaning on the reform of the Natural Monopolies.2. Analyses the main problems underlying the Natural Monopolies.3. Analyses the outstanding issues by reviewing how developed nations have dealt withreform and drawing on their experience seeks to learn the important lessons.4. Provides some basic thoughts and solutions on the reform of Natural Monopolies inChina.