China Civil Aviation Relax The Analysis Of The Economics Of Government Regulation

Abstract Deregulation of Monopolistic Industry has been focused from all perspectives especially from theorists in recent years. The way to improve it will be an important task for Central Government of China to do to push forward economic structural reforms in the future. Chinese Civil Aviation Transportation Industry (CATI) as a Monopolistic Industry, its further Deregulation also seems urgent. Concerning above-mentioned reasons, this thesis gives a systematic and historical research about Deregulation of CATI. Through theoretical and positive investigation, we try to look for the intentions and motivations of Deregulation. In terms of explanation of the Deregulating process in CATI, we analyze and assess the effects of Deregulation in recent 20 years based on Industrial Organization (IO) Theory, then point out the problems in this process. We also predict the possibilities in future Deregulation of CATI. In this paper, we discuss the basic characteristics of the Airline Industry (AI) depending on Economies of Scale, Economies of Scope and Economies of Network. "Regional Market" is quoted to explain that the feature of Natural Monopoly or Competition in AI is dynamically changeable depending on different conditions. By empirical description and study about Deregulation process of CATI, we attempt to find out why Government-Leading Deregulation occurred and emphasize that transfer from Central Government Planning Economy to Market Economy is the root cause. We also comment the effects of Deregulation in CATI from three aspects—Market Structure, Market Conduct and Market Performance. By this evaluation for processing of Deregulation we summarize that the firms supervised by government is the syndrome of these problems. Furthermore, the surroundings among which CATI exists are remarked and some forecasts about Regulation structural reforms and adjustments of Regulation policies in future are made. The concerned innovations are as follows. First, we introduce the basic economical features of the Airline Industry by the theory of "Economies of Network", and also quote "Regional Market" to explain Monopolistic and Competitive features in AI. Secondly, we claim that the fundamental cause of Deregulation of CATI is Transfer of Economic Structure. Thirdly, we establish a space frame from horizontal and vertical dimensions to study and evaluate the Market Structure of CATI. At last, we point out the defects and limitations of air-route joint operation in view of mechanism design.