Research On Administrative Monopoly And Regulation Of Chinese State-owned Enterprises

Since the reform and opening-up, China’s economic and social development keeping with a highspeed, people’s living standard has been greatly improved. The electric power industry is the basicindustry of the national economy, so it plays a strong radiation and leading role in our country’seconomy. During50years, the infrastructure of China’s power industry has constantly improved.The national power generation capacity increased very fast, and by the end of2011, it reached1.06billion kilowatts. The power generating capacity and the size of the power grid is No.1in the wholeworld. At the same time, our country optimizes the electric power’s sources structure, theproportion of new energy and renewable energy are rising now, hydropower，nuclear power andwind power are developing very well. The electric power industry has made great achievements, atthe same time, we also realized that the development of the power industry can not catch up to thespeed of economy, power shortage in the summer is very frequently, and it brings a certain amountof inconvenience for our residents and factories. As the power industry exists administrativemonopoly, the relative lack of competition caused high electricity price and the loss of consumerwelfare.The administrative monopoly is a limitation or exclusion of competitive behavior via governmentpublic power, commonly exist in every country. Tt hinders the nationwide free flow of goods andelement, crossing industry and regional, destroys fair market competition and social order, results inmisallocations disorderly competition, unequal income distribution, corrupt rent-seeking, and localprotectionism and market segmentation vicious. Therefore, it has been widely concerned by all thecountries. Last century, western countries had corresponding reforms in response to theadministrative monopoly, and achieved significant effects. Due to the long-term historical reasons,the administrative and official standard mechanisms of power in the original system of china, beganto variation and seek a new environment. As China is still in the exploration period of the socialistmarket economy, it`s legal regulation is far from perfect. Thus, the original administrativemonopoly power relying on a very unsound market mechanism, find a new chance of survival andconditions. Chinese government and relevant departments are actively exploring reasonable mode of electricpower industry. Since1985, Chinese government carried out reforms for4times, the reform gainedobviously effect, the degree of administrative monopoly has been reduced, especially in the powergeneration sector has been presented diversified competitive situation. But after a series of reforms,the integration of China’s power industry assets and management has not been radically changed,the electricity reforms need to continue, and the relevant policies need to improve.This paper mainly discusses China’s power industry. At first we discuss the basic concepts ofadministrative monopoly, analysis of the causes and the harm of the administrative monopoly. ThenI take advantage of the ISCP framework (according to the Harvard School of SCP framework) tomeasure monopoly level of China’s electric power industry and analyze the welfare losses causedby the monopoly of the power industry. According to the assessment of the huge welfare lossescaused by the power industry administrative monopoly, we realize the seriousness and urgency ofdeep reform in the power industry. Finally, according to the power sector reform experience ofWestern countries, we proposed policy about the electric power industry’s Monopoly regulationpoint at the status quo of China’s electric power industry.