Analysis Of Organization Of Tobacco Industry In China

Tobacco industry is a basic industry in China national economy and the largest source of revenue of Chinese government. Therefore, the government established a tobacco monopoly system by enacting Tobacco Monopoly Law, and a series of regulations and policies to establish the monopoly system. There many problems in Chinese tobacco industry such as concentration is low, scale of the enterprise is small, Market segmentation and administrative monopoly the problems that exist in Chinese tobacco industry, became basis points of the study on Chinese tobacco industry organizations.This paper is to try to answer some of these problems, using industry economics and institutional economics theory as frameworks and methodology, using compare, empirical research and regulatory research. Regard the industrial organization and monopoly system as a focal point, the analysis of the Chinese tobacco industry statusThe article is divided into three main parts.In PartⅠ,regard Chinese tobacco industry's competitive advantages as a precondition. Through Comparison with advanced foreign companies and factor analysis, identified tobacco industry its position in the global context, built up a foundation for the discussion.In PartⅡ, using empirical methods, to study Chinese tobacco industry's characteristics using SCP analytical framework get those conclusions. The market structure is inconsistent with the market performance. The market structure has some issues that having a large number and scattered enterprises, small-scale, low economies of scale and high administrative barriers which are characteristics of market decentralized competition. But monopolistic market behavior and lower performance are closely related to monopoly. Then with the inspiration of that non-consistency, using the institutional economics theory and the composite methods of quantitative and qualitative analysis , it has studied on the tobacco monopoly system's impact on the market performance and further analyzed the history, market segmentation and the cause of the monopoly system. As a result, it found that the market structure and market performance was not a simple decision relationship, system factors and the market performance of tobacco industry in China also exist significant relevance. Monopoly system also has a greater impact on the market performance. It is monopoly system that caused the non-uniformity between the market structure and performance.In PartⅢ,using standardized methods study on social welfare losses of the Chinese tobacco industry. Introduce the necessity and possibility to correct the losses.Provide a theoretical basis on China's tobacco industry, especially tobacco monopoly system reform. This paper presents a number of recommendations and measures about Tobacco industry organization optimization and tobacco monopoly system reform. Hope benefit the tobacco industry's development in futureThe innovations in this paper are using the statistical data in SCP analytical framework get those conclusions.The market structure is inconsistent with the market performance; using linear regression model determine the relationship among the market structure, monopoly system and the market performance. Results revealed monopoly system leads to inconsistent between the market structure and the market performance.