The Study On Port Privatization And Regulatory Reform In China

Modern seaports are interfaces between several modes of transport where goods are not only in transit, but they are also sorted, manufactured and distributed; Seaports are multi-dimensional systems, which must be integrated within logistic chains to fulfill properly their functions; Another role that some large seaports play is to serve as hubs for connection and transshipment; Moreover, seaports are regarded as focal points for regional economical development. Therefore, within the industrial organization and neo-regulation economic analytical framework, this dissertation is devoted to studying explicitly the property rights of port industry and institutional framework, to evaluating the most efficient way to introduce inter- and intra-port competition from an economic point of view, to reconsidering regulatory framework to meet the evolving requirement of market economy.In the past several decades, we have witnessed profound changes on property rights of port industry and its regulatory institution which significantly modified ports' operations and intensified port competition. Traditionally, public ownership in the port industry has usually been justified by the argument that seaports play a key role for national economies, and they have special characteristics (natural monopoly, public goods and externalities, etc) that can easily provide the firms running port facilities with market power. During the new era, it is not evident that public organization of this industry is necessarily the best option. In particular, tighter public budgets and less-efficiency have led governments to seek private participation in seaports. International experiences have shown that private participation in both operations and infrastructure aspects has improved significantly the outcomes of some seaports and to design more adequate regulatory mechanisms to guarantee efficient outcomes have proved to be crucial. With the ongoing port institutional reform during the transition of the economic system towards the market economy in China, the proprietorship monopoly by the state is transformed todecentralization and private sector participation. International theoretical study, experiences and their propositions on regulatory policies can be taken as references for a revision of the traditional administrative governance of seaports in China and change the responsibilities of public sector from "rowing the boat" to "steering the boat".The structure of this dissertation is the following: chapter 1 presents a brief economic theory on port privatization and regulatory reform. Chapter 2 describes and summarizes the more innovative international experiences. Given the heterogeneity of institutional characteristics and ports itself, chapter 3 recommends different privatization forms associated with port organizational models and draws the regulatory framework in the port industry in China. Chapter 4 contains the' key aspects of an incentive regulatory contract-one of the basic regulatory instruments to introduce private participation and effective regulation in seaports in the transiting economy. Finally, chapter 5 deals with the strategic/tactical behavior being probably taken by the quasi-monopoly firms during the process of privatization so as to provide regulatory reform with the basic firm behavior analysis. This dissertation concludes that during the market-oriented port reform, the combination and coordination of these three -privatization, competition and regulation- should be emphasized to improve corporate governance, stimulate competition and reduce regulatory inefficiencies, to effective economic efficiency and improve social warfare finally. On the one hand, regulatory reform can enhance competition and privatization, improve the ability of protecting fair competition and remain effective competition in the markets. On the other hand, without proprietorial constraint, privatization can smooth the way for enforcing competition policies and boost regulatory reform more efficiency.