Organizational Restructuring Of China's Tobacco Industry

Tobacco processing industry has the largest contribution to the country's finance in the whole tobacco industry.Since 1987,China's tobacco industry has been the largest source to the central and local fiscal revenue.Tobacco industry occupies an important position in the national economic system for its great contribution.Production and sales volume of the tobacco industry in China accounts for 42%of the world,so there is no doubt that China is the world's largest tobacco consume market,but the situation of "scattered,chaotic,low," limits the development of China's tobacco industry,The whole competition strength of the industry is rather low.For huge consume market and the blockade of the country to tobacco products' sale,China is seen as the "last bastion" in the world's tobacco market by the international tobacco giant.All the major tobacco companies always pay much attention to the world's largest tobacco consume market—China.After the accession to the WTO,with the gradually opening up to tobacco industry,China's tobacco industry face the competition of the international tobacco giant,industry competition will be increasingly fierce.In this paper,the author,adopting the theory of industrial organization and using the paradigm of the SCP,analyze China's tobacco industry's market structure,market conduct and market performance,and make a detail description and analysis of current situation of China's tobacco industry's.On the basis of current analysis and combine the significantly rising of market concentration and the obviously improved performance of the industry,which due to the adjustment of the past few years the tobacco industry structure,this paper take the advantage of profits and taxes/output, CR8,HI,profits and taxes,the average yield and the smallest economy of scale (MES)and so on to establish a linear regression model,To do empirical analysis on the effects of adjusting China's tobacco industry structure,and get the conclusion: there is a positive relationship between the performance of Chinese tobacco industry, which is also called economic performance,and market concentration and the average size of the enterprises;there is a significant positive relationship between the performance of tobacco industry and MES;there is a positive relationship between the MES of the Chinese tobacco industry and the concentration of tobacco industry. Then,this paper analyzes the welfare effects of adjusting organizational structure on China's tobacco industry in theory.Finally,the author analyze the reasons which affect China's tobacco industry structure from the system factors.China's fiscal and taxation policies is the deep reason for the current situation of China's tobacco industry,"scattered,chaotic,low,",the plan target system hinder the effective allocation of market resources,While local protectionism which forms in the Circulation mechanism with the district administration intervention leads to regional trade barriers and production and circulation of cigarette consumption out of line.On this basis,the author propose the policy suggestions on promoting the adjustment of China's tobacco industry organization structure, including macroeconomic policy adjustment and implement steps of restructuring of the tobacco organizations.Accelerating optimal resources distribution of China's tobacco industry,and promoting the form of big market and circulation,And ultimately form the market structure which consist of 3-5 large-scale tobacco firms,which sale in the size of more than 5,000,000 boxes.