Improving The Competitive Path Of China's Railway Industry

To counter the current trend of descending competition ability of our railway industry, this paper analyzes the present problems of the railway industry and their roots and deems that faster and deeper reformation is the key way to enhance the competition ability of railway industry. Meanwhile, the corresponding problems with railway reformation, such as ways to break monopoly and introduce competition, reorganization models for the railway enterprises and the railway price policy are thoroughly studied, utilizing economics theories and experiences from foreign railways reformation. The paper proposes the goals and principles of our railway reformation, and also the detailed tasks and ways to implement them.The paper first introduces the historical systems of our railway industry, the three reforms in our railway history and the various reformation methods that are being discussed. It analyzes the current status of our railway industry and points out the primary problems. It deems that mixing enterprise functions with government functions, monopoly management, inflexible transportation price system, rigid earning distribution system and closed investment system are roots of the problems. The only way to enhance the competition ability of our railway industry is to expedite and deepen reformation of the management system. We have both the inside conditions and outside environment for railway system reformation.The key problems of railway system reformation is how to break monopoly and introduce competition, how to choose reorganization models of the railway enterprises and how to work out the railway transportation price policy. The paper makes thorough analysis of these problems. With regards to the matter of how to break monopoly and introduce competition, this paper considers that introducing internal competition is complicated but necessary. Going private does not equal to breaking monopoly. The technology advancement plays an important role in introducing competition. To introduce competition, we can open the market entrance, auction the concessionary management authority and develop parallel line competition. We should not underestimate the effects of outside competition and also should strengthen supervision and management from the government. With regards to the railway management model, this paper figures that, considering the reality of our transportation systems, we can choose a mixed model named 'separation of infrastructure from operation + regional companies' and at the same time, we should effectively deal with the matter of'Way Access Authority'. With regard to the railway transportation price policy, the paper deems that the railway prices should be different at different areas. The railway price should be guided by market demand and should be in favor of fully utilizing the existing transport capability and participating in market competitions.This paper makes economics analysis for the goals and ways of railway reformation. It deems that the railway reformation, aiming at increasing the economic benefits of involving parties, should enhance the supply efficiency of railway transportation products. The main task of railway reformation is to separate government and enterprise functions, to separate government and capital, to break industry monopoly, to introduce internal competitions, to form market based investment prompting system and finally to establish effective government supervision system. The railway reform should be carried out from bottom to top.