Comparative Research On Regulatory Reform Of Electric Power Industry Between China And Russia

Electric power industry is an important basic industry of national economic development. It plays an essential role in supporting the development of other industrial sectors. Its characteristic of natural monopoly, externalities and other economic or technical characteristics deicide the necessity to be regulated. Russia and China have been had many similar characteristics since the period of planned-economy. The target of regulatory reform of the power industry is to improve the efficiency, but the different constraint conditions formed a different path of regulatory reform between the two countries.This paper closely discusses about the differences of constraint conditions between China and Russia, how about the power industry regulatory reform went on under such differences and studies about the influence of property rights, market structure, regulation and constraints to the performance of regulatory reform under a developed framework of the regulation economics.The paper is divided into eight chapters. The first chapter is an introduction. First of all, proposes the topic under three perspective of the importance of the power industry and regulation, the necessity of comparison in regulation between China and Russia. Secondly, reviews and comments on power-related research from three aspects of the government regulation on natural monopoly, regulatory reform of power industry, and comparison of government regulation between China and Russia. Finally, introduces the significance, innovation, research methods and structural arrangements.The second chapter proposes a framework for comparative analysis of government regulatory reform of natural monopoly industries for transition states. A developed regulatory reform framework formed under the basic of the theory of regulation economics, joining the market factors of structure, property rights and the specific constraints. All these factors determine the performance of regulatory reform.The third chapter compares the constraints of regulatory reform between China and Russia. Different constraints form different transition path and strategies of the two countries, thus form a different path and strategies of regulatory reform of power industry, including reform of property rights, market structure and regulatory system, and different reform objectives formed by different constraints ultimately influence the judgment of regulatory reform performance.The fourth to the sixth chapter are about the comparative analysis on the property rights institution, market structure and regulatory institution between the two countries which formed under the specific constrains. Chapter four compares from the perspective of property rights institution. Different form of ownership, whether state or private is formed in the process of regulatory reform of different countries, and has its theoretical support. The formation of different property rights institution is influenced by the different objectives and constraints of the regulatory reform in the two countries.The fifth chapter compares from the perspective of market structure. Russia goes ahead of China in the structural reforms of introducing competition mechanism. The reasons are, on the one hand, China has weaker technology than Russia in the separation of four links; on the other hand, new interest groups and mid-term status of preference has formed in the process of gradual reform, and frustrated the further reform.The sixth chapter compares from the perspective of reform of regulation institution. Regulation institution is composed by the technical meathods and system of regulation. The technical methods of regulation mean to replace the traditional regulation of incentive regulation, to provide incentives for enterprise efficiency. Regulation system includes setting up regulatory bodies, setting and implementing regulatory legislation. Regulation system affects the credibility of commitments, and ultimately affects the performance of regulatory reform.The seventh chapter evaluates the performance of regulatory reform. By comparison, the short-term performance of China is better than Russia. It's because that the gradual reform in macroeconomic reforms of China created a good environment for the reform of power industry, but radical reform in Russia caused the deline of production, although the reform achieved the political goal of unreversed, but paid a terrible price. In the terms of long term performance, Russia is better than China probably. This is because China's gradual reforms carried out from the aspects of incremental reform which is more easy, but the stock component of the economy has not completely reformed, property rights reform is slow, competition structure in the market has not fully formed, regulation system is not perfect. The basic framework of property rights, competition, regulation has not completed, which became the "bottleneck" of further development. Efficient basic institutional framework is established in Russia, for which great costs have been paid. The things for Russia to do are effectively promoting the performance under the existed framework. So, in the long run, performance of Russia may be better than that of China.The eigheth chapter is the conclusion and enlightenment. Firstly, summarize for the reform path of the two countries'. China follows the path of gradual reform of coordination, and Russia's reform path can be summed up as from the radical imbalance into the path of gradual reform of coordination. Secondly, summarize the factors which may impact the performance of regulatory reform. Finally, propose suggestions for further reform. The biggest constraint of regulatory reform in China is "government-enterprise alliance" which formed under the traditional system of "administrative monopoly". Getting rid of regulation blockage which led from "government-enterprise alliance" will help promoting further regulatory reform and achieving better performance. For Russia, to prevent from going backwards under the established regulatory framework will help to guarantee better performance of regulatory reform.