The Diversity Of Investors Reform On Monopoly Industries In China And Regulatory Policy

Economists generally believe that monopoly industries have their special technical and economic characteristics such as high investment demand, long investment recovery period, large sunk cost, remarkable scale economy and network economy. If many enterprises are allowed to operate competitively and new enterprises are allowed to participate in, monopoly industries will be not sustained. Therefore, traditional economic theory holds that monopoly industries are the typical field of market failure and market competition mechanism will be not effective. In order to overcome the market failure of monopoly industries it is suggested that state-owned enterprises implement monopoly management. Practice showed that the monopoly management of state-owned enterprises leads to huge efficiency loss especially in China whose characteristic of administrative monopoly is significant. So, how to overcome the problem of low efficiency resulting from monopoly management of state-owned enterprises is becoming a worldwide puzzle.In this presentation, first, there is deeply theoretical analysis of the necessity and feasibility about investors diversity reform on monopoly industries; then, discuss the privatization reform of monopoly industries in developed countries, analyse the effect and practical significance and summarize their experience and lessons; last but not the least, seek the regulatory policy of government after privatization reform for monopoly industries in China.There are four chapters in this presentation. Chapter 1 is the introduction. In this part we investigate the background & significance, related definitions, methodology, contents & framework and novelties & defects of the presentation. Chapter 2 is the literature review and theoretical analysis. Firstly, we study the traditional theories about monopoly of state-owned enterprises in monopoly industries. Then, explore the inner link between the industrial administration monopoly and the state-owned enterprise system. Furthermore, research the theoretical foundations for the diversity of investors of state-owned enterprises reform. Finally, we find that the diversity of investors of state-owned enterprises reform is an important breakthrough of breaking the industrial administration monopoly. In Chapter 3, we research the privatization reform of monopoly industries in developed countries, analyse the effect & practical significance and summarize their experience & lessons. As to Chapter 4, we probe into the regulatory policy of government after privatization reform for monopoly industries in China. In this part, to begin with, we carry out the demand analysis of government regulation after the reform; after that, investigate the limitation and dynamic characteristics of the post-reform regulatory policy of government.Based on these analyses, we believe that competition and investors diversity reform are basic factors of fundamental reform of monopoly industries in China; we can choose the effective way of investors diversity reform according to the properties of distinct monopoly industries in different steps; corresponding reform about the government regulation system is seriously needed. After the investors diversity reform the problem on government regulation in monopoly industries will be more sophisticated and challenging. All these make it true that reform on government regulation in monopoly industries is imperative and the innovation of regulation mode should be implemented constantly.