Monopoly and the Tense Relationship Between Private Investment

Council recently issued a circular, the NationalBack in 2005, the State Council on the introduction of
Development and Reform Commission, Ministry ofprivate investment to encourage and guide the
Commerce, Ministry of Finance and otherhealthy development of the "non-public 36" and the
departments were more than 20 bear 40 toopening of the part of the monopoly in the field, but
encourage and guide private investment and healthyprivate capital in areas of these monopolies are not
development of the division of responsibilities andgoing well, the main because I am afraid is the
tasks. On private capital, this is their eagerlyrailway, telecommunications, and financial reform of
anticipated.monopoly industries is not synchronized to follow up.
With the guide private investment in theAs the monopolist to the market to regulate prices
development of clear division of labor, 5 dated 13'sand output, so the damage is obvious. On the one
"State Council to encourage and guide privatehand, monopoly access to excess profits through
investment and healthy development of a number ofmonopoly, leading to inefficient investment, and also
opinions" is expected to combine the specifichindered its expansion of business scale of the
circumstances related areas, further refinement andinitiative. On the other hand, a monopoly of social
decomposition, made more provision of targetedcapital through the trade monopoly to prevent
measures.access to the industry, limit, exclude competition,
At present, encourage and guide private investmentprivate capital had a "crowding out effect."
capital into the increasingly broad. But we must seeWith retail of refined oil, for example, although the
that restrict the development of private investmentwas state-owned, private, foreign competition in the
difficulties and obstacles still "lingering": In somecommon situation, but nearly 100,000 gas stations,
traditional areas of monopoly industries and there aretwo groups affiliated stations accounted for about
still constrained private investment into the "glass50% of its total sales volume of oil sales account for
door" or "Spring Door" issue; Bank credit moreabout 70%. Lack of oil sources can be described as
toward large projects and large enterprises, SMEdifficult the development of private oil enterprises.
financing problems have not been solved; the policyAll along, though monopoly industries in reducing
environment for private investment need to continuebarriers to entry, but in a strong monopoly under
to improve, and so on.heavy compression, the development of private
The data from the National Development andcapital difficult to have picked up greatly. For
Reform Commission show that private investment inexpansion of private investment, break all the barriers
the traditional monopoly industries and the proportionmonopoly industries, build a fair competitive market
of very low fields. Electricity, heat production andenvironment is a priority.
supply of industry accounted for only 13.6%, 12.3% inNext, as soon as possible to reform and clean up
education, health, social security and social welfareprivate investment growth in the institutional
accounted for 11.8 percent, in the finance industryconstraints and policy obstacles as the nature of a
accounted for 9.6%, in the information transmission,macro Diaokong Zhiguanchongyao the content,
computer services and software industry accountedespecially Longduan sector reforms such as railways,
for 7.8%, in transport, storage and postal industrytelecommunications, finance, and so full Jihuo private
accounted for 7.5%, in water conservancy,investment and promote stable and rapid economic
environment and public facilities managementdevelopment. On the second half growth likely to
industries accounted for 6.6%, in public administrationslow down the Chinese economy, this point is
and social organizations, is only 5.9%.particularly important.