Research On The Effective Governmental Regulation Of Natural Monopolies

Generally natural monopoly industry is public enterprises. They hold the national economy and directly related to the efficiency of the entire national economy and social welfare. However, due to natural monopoly characteristics and as a form of monopoly, it has monopoly power. Natural monopoly theory is built on the basis of a market economy. And China is still in early stages of socialism, the socialist market economic system is not perfect. It makes the low economic efficiency of natural monopoly industries and seriously damages the public interest. This provides the necessary condition to natural monopolies enterprises which is had government regulation by government. But for a long time China takes the traditional regulatory instruments and still has not enough emphasis on regulatory reform of natural monopoly industries. This is contrary to the basic requirements of establishing under the socialist market economy. This non-equilibrium which was presented the development of natural monopoly industries in China is not conducive to inspire those of state-owned natural monopoly business initiative. This will be difficult to meet the needs of the real long-term natural monopoly industries and thus improve social welfare. This article is based on previous research; it not only learns from foreign natural monopoly reform experience but also closely links to the special conditions of China. Based on the reality of our country, from the technical and economic characteristics of natural monopoly and point of view of property industry, the article proposes the ideas of regulatory reform of natural monopoly industry. Meanwhile, it provides countermeasures for the effectiveness of government regulation. I hope that this paper can provide some reference and inspiration to the ongoing reform of natural monopolies.