An Empirical Research On The Effect Of China Power Industry's Market-Oriented Reformation

In April 2002, the State Council promulgated the electricity restructuring plan programs focus on the problems of monopoly, existing power system unsuited to the requirements of the market economic system and inadequate competition. It concerns partition and recombination of the electricity industry into five generate electricity corporations, four supplement corporations, two power grids and one regulation institution. The five generate electricity corporations are China Datang Group, China Huaneng Group, China Huadian Group, China Guodian Group and China Dianlitouzi Group; the two power grids are Southern Power Grid Corporation and the Nation Power Grid Corporation. So a new power industry pattern appears as"1+5+4+2".From then on, more than four years have past, what is the effect of China's market-oriented reformation, and how did the new reformation effect the performance of the mass generate electricity corporations? Definite answers to these questions are the keys to further reformation. With those questions, this paper uses the SCP theory of industry organization to start the empirical analysis about the effect of the power industry's market-oriented reformation.Firstly, this study introduces the related concepts, such as SCP model and studies on the power industry's market-oriented reformation at home and abroad.Secondly, this paper analyzes the current market structure of china's power industry by analyzing five generate electricity corporations'assets and equipped capacity cent of the country's, we conclude that the five corporations have strong market power and high market share in the generate electricity market, the market structure is oligopoly approximately, not the effective competition with scale economy and competitive energy. So, the so-called monopoly breaking only broke the vertical integration mechanism lowed the monopoly degree, however, it's still far from the competitive markets, let alone the perfect competition.Thirdly, it's about our country's power industry conduct analysis, mainly form the following three aspects: price discrimination, universal service and government conduct. Because our country don't have uniform power trading market and have varieties price, so there are price discriminations in accessing to power networks and trading market, this results to the unreasonable resources allocation and serious waste, which have negative to the corporations and users. As to universal service, the speed is marvelous, so is the cost! So we should consider the cost into universal service from now on. Our government regulates the power industry mainly through price regulation and entry regulation. But date reveal that when the coal price index declined, there is no and decrease in electricity price, the abnormal price shows price regulation failure, at the same time, the higher entry barriers stop social capital.Then, empirical analysis shows that our country's power supply developed faster than that of the Gross Domestic Product in these years, but because of the government's strict control, the electricity supply is unstable, electric scarcity occurs regularly, and compared to the international standard, our country's power structure is irrational, it's too depended on the coal, so with the shortage of coal and the increase of it's price, decreasing the power price is difficult. At the same time, high coal consumption also leads to great environment pollution. The efficient index shows that power industry's labor production increases after closing several higher input-lower output small generate electricity enterprises. Capital-labor ration increase shows that our country's power industry is changing form labor intensive industry to capital intensive industry. However, the company's operating cost is increasing owing to the increase of fuel price, such as petrol, coal. So introducing lower coal consumption generator and adopting clear resources are ways out. Using date envelope analysis to analyze 35 typical generate electricity companies in Shanghai and Shenzhen stock exchange, we concludes the same phenomenon as above. To our pleasure, thanks to the partition and reconstruction in 2002, the scale efficiency, output technological efficiency and combined efficiency all have increased.Fourthly, it's about the influential factors, it's own technical and economic characteristics, enterprise scale, investment barriers and market conducts affect power industry's structure, industry conducts are affected by the imperfect market structure and regulation of the electricity system, then industry market structure and conducts affect the performance altogether. So far, it can be said the Structure-Conduct-Performance analysis model comes to a successful conclusion, it should be emphasized that in order to explore the precise performance of the electricity enterprises, a regression analysis is also conducted, which provides a reference to improve the efficiency of the enterprises'performance. .Fifthly, Suggestions are proposed from the structure, conduct and performance of China's power industry, the current structure can be improved through introducing competition and lower barriers, improving the policy framework and separating government and supervision's responsibilities and improve power industry's conduct, and marker performance can be improved through structure optimization and encourage the enterprises to improve their own performance on the basis of total power supply's stable development.Finally, the conclusion of this paper is a brief summary of my research work, which points out the role of the article, as well as the limitations and the need to improve, he latter is also the goal of my future work.