The Study On The Government Regulation Of Natural Monopoly Industry In China

Traditional regulation theories hold the view that natural monopoly industry has the characteristics of scale economy,scope economy and cost of subadditivity,and government needs to regulate these industry strictly.Since the1970s,with the development of technology and market demand expansion, the theories of frustrated regulaotion and the development of competitive market present a challenge for the traditional regulation theories. Since the1980s,the government regulation in the natural monopoly industry tend to weaken,western countries introduce more market competition in some possible field in the natural monopoly industies such as telecommunications, electric power, railway, civil aviation,and so on.The regulation reform has promoted the development of tese industries greatly,and improved the level of social welfare.From the experience of government regulation reform in the western countries,the reform mainly through introducing competitive mechanism in non-monopoly business,and stimulating regulation in monopoly business,privatization of property rights and the improvement of legal system.The natural monopoly industries, such as electric power, telecommunications, railway, city public traffic, are related to people’s daily life, they also play a decisive role in the economic development development and plays a basic role of the whole society.At present,government regulation of natural monopoly industry has transformed from state-monopoly during the period of planned economy to modern government regulation under the market economy,the reform has obtained certain results,but the governmental regulation system of monopoly have not made a fundamental transformation.Our country is in the economic transition period, as the foundation and lifeblood sectors of national economy,natural monopoly industry regulation reform is one of the important contents of socialist market economy reform, it is also the inevitable requirement to enhance our international competitiveness under the trend of globalization.Gowernment regulation of natural monopoly industries of our country is of much More particularity and complexity for its inner developing logic and administrative- monopoly and various interests. This master’s thesis identified multiple factors of the failure of government regulation of natural monopoly industry. In addition to the government-business alliance and administrative monopoly, the lack of institutions of property right system, the developed law system and supervision system are also the important factors of failure in government regulation.Chinese govemment regulation of natural monopoly should and must go beyond administrative-dominant monopoly, and to perfect the related system,including the relevant legal system, the establishment of independent regulatory agency, the establishment of social participation and supervision mechanism, promoting the reform of property right and so on. Chinese governmental regulation of natural monopoly should realize the transformation from ministerial administration of the planned economy to modem government regulation of market economy.