Recent Developments in China, the US and Europe
Edited by Michael Faure and Xinzhu Zhang
Chapter 8: The Industrial Regulation of China: Basic Experiences and Lessons
Fuliang Chen 8.1 INTRODUCTION Since the reform and opening-up, many industries in China, such as telecommunication, electricity and public utilities have begun to reform and restructure in order to introduce competitive mechanisms to these industries and improve efficiency. Following these changes, industrial regulation reform is also being implemented. Given that the characteristics of each industry differ, the evolution processes of regulation also differ as do the necessary strength and methods of industrial regulation. The effects of regulatory reform are also different. Some industries have simply established a competitive structure, others have already attained a sufficient degree of competition, while other industries have done nothing. This chapter describes the regulatory policy development of the telecommunication, electricity and public utilities industries and their performance. These industries have been selected because they are currently in different stages of regulatory evolution and regulation is implemented by different regulatory mechanisms. We are going to show the similarities and differences in regulation between these industries and attempt to answer the following questions. What are the similarities in the composition of industry regulation? How does the competitive mechanism evolve? And how does it affect the regulatory structure? To improve competition, what kind of roles do regulation and legislation play? Can we discover something that is common to the practice of industrial regulation, or learn some lessons that can help us to discuss the future direction of regulatory reform? 8.2 THE DEVELOPMENT OF CHINA’S INDUSTRIAL REGULATION To have some idea about the current situation and the future direction...