The Study Of China's Railway Industry Monopoly Reform

Since 20th century, the countries from the whole of the world have strived to reform the traditional natural monopoly industries. Loosening control and building competition became the core purpose of this global revolution. In China, the government also puts this kind of change on the desk. The substantial changes of national power, telecommunication and civic aviation have occurred, but the change of rail way industry is slow relatively. So in this paper, I want to discover an appropriate way of reforming the Chinese rail way industry through research of the theory and execution of the natural monopoly industries.Rail way industry is not only the important foundational industry in national economics and social development, but also a kind of natural monopoly industry that affecting the whole country significantly. This feature determines that government must to do something to control the growth of rail way industry. As we know, the traditional construction of the rail way industry is vertical integration, which means the business of the companies involves both the monopoly phase (that cannot build competition, such as the laying of the railway tracks) and the competition phase (such as the operation of the railway). In china, the national department of rail way is playing a role as a vertical integration company that dominated the national wide market. So far, there are so many shortcomings of rail way industry in our country: increasingly losses as a whole, a sharp reduction of industrial competition and a serious decrease of the transportation market share year by year. Racially,the main reasons of this situation including: the bad railway supervision system, the unformed marketing competitive situation in railway industry and the unbuiltted modern enterprises mechanism in state-owned railway enterprise. Given the situation we are in, we need to enhance the rail way control system, reinforce the supervision mechanism, build a new supervision system, and complete the relevant laws and regulations. Moreover, the railway industry has to separate the government from the enterprise,funds and its supervision. In conclusion, in order to promote the rail way industry nicely and smoothly, we are supposed to create a scientific rail way industry control system and mechanism, which are very well suited for China's specific conditions.