Regulation And Reform On Administrative Monopoly Of Tobacco Industry In China

Tobacco is a special product, that’s why it is closely related with the government regulation. though it is necessary for the government to interfere in this industry, any improper regulation can bring loss of efficiency to the industry.The paper make further study on the development reform and performance of the tobacco industry from economic perspective, in order to find out the deep reasons which leed to the industry’s administrative monopoly,and find the way to reform to stimulate the health development of the industry.Firstly.the administrative monopoly reflected on the tobacco monopoly system.The tobacco monopoly system contributes a lot to the industry’s performance and financial revenue for a very long time,but meantime, the market function was blocked,some disadvantages has been realized as time passed by. These years,government took several measures to tackle with the problem that the tobacco industry faced,we can see through the empirical test that all these measures has good performance,but failed to solve the fundamental problems.Secondly,analysis proves that the fiscal and taxation system is the key reason of the local government protectionism, so reform on the fiscal and taxation system can ease the problem. A game model was built to explain the fundamental reasons of local protectionism, and what’s more important, the model explains well how to reform to ease the situation. Thirdly,based on the conclusion we get from the game model,a system can be desighed to solve the situation.The desigh of the system is critical, it must be both easy and efficient, and the efficient means such a desigh can not only help to break the regional segmentation situation, it also can promote the resources integration of the whole industry. Finally, based on the discussion above, we came to several conclusions. The reform of the tobacco industry must start from the taxation systems. based on it, other reform measures can be taken, sunch as encourage enterprises restructuring across the province, and create new tobacco brand, and so on. All these stratages can promote the resources integration, improve the competitiveness of the tobacco industry in our country, prepare the industry well enough to face the fierce competition in international environment.The paper work on the problem in terms of theoretical and empirical perspective to analyse the administrative monopoly of tobacco industry, came to the conclusion that the administrative monopoly is mainly caused by the unreasonable fiscal and taxation system, Only after the national market be established, can other reform measures to be taken in the new system environment efficiently.