China's Power Generation Market Of Industrial Organization And Changes

In China, for a long period, electric power has always been vertically state monopolized as a natural monopoly industry, until the end of 2002, it was separated and reformed. Competition is introduced into the field of electricity generation. Electricity generation is divided from network and electric power plants should sell their product by price competition. That changes the market structure of electricity. This paper's content surrounds the competition and regulation in the electricity generation part. Based on the "R-SCP" framework, the paper analyzes the market structure, firm conduct and market performance from many angles and reveals that regulation which strengthens competition is still necessary although deregulation is the trend today. Some pieces of advice on regulation are promoted in the last part of the paper.The first part is an introduction on the meaning of the research, the main originality innovations and a summary of some related literatures.The second part represents the "R-SCP" framework on the base of the short points of "SCP" framework and the experiences of other countries' electricity reform. The "SCP" framework is not suitable for today China's electricity reform. We should add "regulation" to the "structure-conduct-performance" framework and use this "R-SCP" framework to analyze the industrial organization of China's electricity industry as well as its change.In the third part, under the "R-SCP" framework, the paper analyzes the market structure of the electricity industry. This part first describes the changes of the market structure during the reform. Then, market concentration and barrier to entrance are estimated. Additionally the effect of regulation, firm conduct and progressive on market structure is also discussed in this part. In the fourth part, the paper analyzed the "C" in the "R-SCP" framework. "C" represents firm conduct. By reviewing, we found the market conduct of firms with different ownership changes a lot during the reform. The relationship between electricity firm and other market subjects gives a good explanation to the firms' conduct. This part also makes evaluations on the firm conduct vertically and horizontally.In the fifth part, market performance is discussed. First the paper estimated the performance by Wilcoxon paired rank sum test, finding that both the profit and the rate of return of net asset are on a downhill road. But the efficiency of production and progressive both have made a big progress.The last part is about some advice on regulation. It's an important task to reconstruct regulation in the electricity industry. The regulation should be good for competition, such as price-cap .