A Research On The Relationship Between Markrt Structure And Market Performance In Chinese Telecommunication Industry

The Third industry restructuring in 2008 makes the reform in telecommunication industry a focus of public attention again. As a direct way of regulation, market reconstruction will undoubtedly affect market performance in a direct or indirect manner. Researching the change moment of the market structure and market performance of Chinese telecommunication will help to know why the three times reconstruction happened and to evaluate the influence of Reconstruction in a certain extent according to analysis the market performance of telecommunication industry. Further more, by researching the inherent relationship between the two aspects, we can make more effective market policy. Reform in telecom industry has been promoted earlier and than other monopoly industries, so the research of telecom industry also applies to other monopoly industries.This paper analysis the market structure and the market performance of Chinese telecom industry and the inherent relationship between them by using empirical and normative analysis method. Through comparing the HHI index in each period, we found that reconstruction has a overall positive effect on the market structure. But this improvement mainly existed in the field of fixed communication and nearly has no obvious effect in the mobile communication. The effect of the third Reconstruction is lack of sufficient information to analysis. Based on the existing research, this paper analysis the changing movement of market performance by using a series of indicators mainly form three aspects:the efficiency of the whole telecom industry, the efficiency of the telecommunication companies and the consumer welfare. The results show that reconstructions have largely promoted the improvement of the telecom industry while the consumer welfare is still unsatisfactory very much. By testing whether several hypotheses applied in the relationship between the market structure and the market performance of Chinese telecom industry through constructing models, we know that the market performance is related with the market share and the efficiency of corporations, at the same time, the degree of market concentration does not affect the market performance directly. Finally, this paper propose relevant policy recommendations that the Government should try to create a futile land for competition while telecom companies should expand market share and optimize their management.