Research On The Reform Of Government Governance System Of China's Telecommunications Industry

Since 1978, the Chinese government relaxing the pricecontrols of telecommunications industry, industry governance reforms have already gone through nearly 30 years. In 1994 the establishment of China Unicom, from the resolution of China Telecom in 1999 to the new restructuring of China's telecommunications industry in 2001 ,the telecom industry faced reform staged ,forming the current six major operators in its competitive market structure. Based on the theory of industrial organization S-C-P paradigm, we can find that market performance has indeed been significantly improved in the vertical , but compared to the horizontal, there is still a considerable gap between the developed countries and our country , international competitiveness and the competitiveness of enterprises in the world rankings more rearward.And different from the mature market economy, China's view of the current transformation of the economic, property is a factor that should not be overlooked, and the introduction of property structure in the analysis framework S-C-P in industry analysis can make the relationship be more stable and more accurate analysis. The main function of property rights is improve incentive through the Internalization of externalities , which decides the enterprise goals behavior. State-owned enterprises operating goal is not to maximize profits, business behavior from optimal market behavior , and the balance of market will significantly deviate from the optimal balance of the general, resulting the loss of the efficiency of the allocation of resources and social welfare . The telecom industry in China, mainly based operator of high proportion of state-owned property rights. Thus, property rights reform in China lagging behind the development of other sectors in China is an outstanding issues in telecommunications industry. These phenomena will be the results of the underlying systemic.According to the state's theory, the North thinks when the government has its own interests to pursue, in some extreme cases, the optimal strategy for the rulers can have a structure, which make economic stagnate and collapse. We can see that the central government's pursuit of the increase of finance , the evolution of the relationship between different departments in telecommunications industry and the resulting conflicting interests after the reform and opening up, constitute the establishment of China Unicom. Chun - Hao Wang thinks that "Similarly, China Unicom ,China Telecom ,the wireless paging and mobile communication enterprises, the vast majority were started by one of a host of administrative bodies, which are the business companies that have relationship with the departments in government. "Thus, the nature posed by the industry management by telecom industry-related departments and industry management monopoly, the government sector interests is precisely the nature's foundation and bonds. Therefore, in accordance with state and the property rights system, the strong interest pursuing of government department during the controlling the process performance is the institutional cause of the lagging of the reform of the property rights in China's telecommunications industry.Although China's telecommunications industry ownership reform has lagged behind, the key to solving the problem lies in the government's own reform. Cutting off the integration of enterprises and government, therefore establishing an independent governance agencies is crucial. Moreover the traditional telecommunications sector has been difficult to realize their own role, especially with the rapid development of the communication after the reform and opening up. Monopolistic position in the telecommunications sector is a huge sector of economic interests, and for a monopoly to unconditionally give up its monopoly status extent of their property rights, not impossible, the matter is extremely difficult, let alone the integration of enterprise and government and profits together. the special governmental organizations in an administrative monopoly status. The problem of separating government functions from enterprise management from the interests of government departments is serious, and then an effective system of property rights can not be established. Therefore, the development of China's telecommunications practice in history shows us that the government to achieve its own reforms is a prerequisite for the achieving reform in industry. Therefore, the proposed policy has always revolved around the theme of government reform, and the policy recommendations of the government is to reconstruct the core governance framework, the establishment of an independent regulatory body, then on this basis, establishing a modern enterprise system, cultivating genuine competition mainstay in the market, these including the introduction of the competition mechanism with the change of property rights constraint mechanism and the improvement of the corporate governance mechanism.