Research On Regulation Of The Urban Water Supply Industry In China

The development of the Urban Water Supply Industry (UWSI) is closely related with the production and people's life. It is also an important part of the urban function. During a long period of time in planned economy, water supply industry has been regarded as a public good or welfare cause in China and therefore has been invested, monopolized by the means of regulation on low price and high fiscal subsidy. However, with the economic system transformation from central-planned economy to market-oriented economy and the development of city agglomeration economy, followed by fiscal burden and lack of supply, this government regulation directly led the UWSI to develop slowly and became the bottleneck of urban economy and social development. Hence, it is very urgent to establish an insightful and flexible government regulation system of UWSI.Starting with a review of the theories about government regulation, natural monopoly and UWSI reform, this article offers a studying frame. Based on the economics of net. we define the UWSI and its characteristics and analyze theoretically the regulation, including entrance regulation, price regulation, market structure regulation. We also conclude our country's UWSI government regulation system, present conditions and shortcoming. And then based on the game theory, we analyze our country's UWSI entrance regulation and price regulation. We exam our country's regulation result in view of price level of UWSI, profit of regulation, static efficiency, dynamic efficiency. To take dynamic efficiency into account. we use C-D function and SPSS10.0 to calculate the TFP. And the last chapter draws some conclusions and offers some policy implications in the terms of perfect regulation law. standardizing regulation system, re-organizing market structure, properly setting down regulation price.