Chapter 12: Anti-monopoly regulation of the market behaviour of public utility enterprises
In today’s China, aside from administrative restrictions on competition such as restrictions on access into particular sectors and local protectionism, other restrictions on competition are largely from monopoly industries. Monopoly industries refer mainly to public utility enterprises and other enterprises that hold statutory monopoly status, such as water, electricity, gas, heating, postal services, transportation, telecommunications, tobacco, salt, insurance, commercial banking, rural credit cooperatives, oil, petrochemicals, funeral services, and Xinhua bookstores in China. This chapter discusses restrictions on competition by public utility enterprises related to pipe and network infrastructure. The services (water, electricity, gas, heating, and so on.) provided by public utility enterprises have particular characteristics that are distinct from insurance, banking, and other sectors with statutory monopoly status. As seen in developed market economy countries, the market economy uses competition to manage micro-level activities. The market economy must be closely connected with competition, as the key characteristics of the market are that enterprises autonomously decide their production and operating practices, and this kind of dispersed economic planning needs to go through the adjustment of market prices. Market prices are created under the conditions that competition exists and new companies can freely enter. Competition forces companies to lower costs and motivates them to innovate. Therefore, as a process of adjustment and innovation, competition is a component of any market and cannot be neglected.
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