Research On The Barriers To Entry Of Private Capital Investment In China’s Railway Industry

The railway industry has an irreplaceable role in Chinas transportation industry,it is not only related to tourism, trade, logistics,but also the bonds of economic tiesand economic exchanges.Chinas railway industry has experienced a hundred years of development hasencountered a bottleneck.The problems about decline in profitability and lack oftransport capacity have appeared. In order to reverse this situation,in2000.8,Ministry of Railways have introduced policies to encourage external capitalinvestment in Chinas railway industry, but the effects of policies is not very good,in2012.5, Ministry of Railways introduced policies again to encourage and guide privatecapital to enter the railway industry in compliance with laws and regulations, and thisopens the door for private capital investment in monopoly industry.In this paper,westudied for the economic barriers to entry and non-economic barriers to entry whichwas meeted in the process of private capital investment in Chinas railwayindustry,analysed the extent and tend of the barriers to entry,and proposed practicalpolicy recommendations to reduce the barriers to entry of private capital investmentin Chinas railway industry,it has the significance of both theoretical and practical.Firstly, this article defined the scope of the railway industry, and summarized thedomestic and abroad researchs.On the basis of the theory and industry status quo, determined the object and scope of this article. Outlined the course of developmentof Chinas railway industry and the introduction of external capital, analysed thecharacteristics of the railway industry and the characteristics of private capital.Secondly,this article analysed the economic barriers to entry in five areas deeplyabout absolute cost advantage, economies of scale, the necessary amount of capital,product differentiation and possession of a unique economic resource. This articleanalysed the non-economic barriers to entry in there areas deeply about theinstitutional barriers,the strategic barriers and the barriers to the characteristics ofthe industry.Finally, this artical summarized the policy recommendations for the railwayindusty to introduce the private capital better, includes two aspects:on the one handbased on management contracts, equities and municipal bonds, asset restructuring,railway industry investment fund, BOT financing mode to broaden the investment ofprivate capital in order to reduce the economic barriers to entry of private capitalinvestment in the railway industry,on the other hand based on the introduction ofcompetition, the separation of government and enterprises, the separation ofnetwork and operation to reform the the management system to reduce thenon-economic barriers to entry of private capital investment in the railway industry.A two-pronged approach is more conducive to breaking the obstacles encounteredby the Chinese railway industry in the process of introducing private capital.Thisarticle also gave suggestions to the follow-up studies.Combing the relevant theoretical knowledge, this atrical analysed the status quoof Chinas railway industry and barriers to entry in the process of introducing privatecapital with new data and a comprehensive view. Combined with the actual situationin the area of policy recommendations, and emphasis on the feasibility of theproposal.