Privatization Routes Study In China Network Basic Industries

The world began to privatize in 1970s and 1980s, and many countries began to privatize their network basic industries in succession. Today, privatization has already been a necessary choose to solve problems and illnesses in network basic industries. However many countries have convinced that there were many limits in privatization. Successes and failures in privatization in the world explain that the privatization is a very complicated issue. This article studies that how to choose fields to privatize and how to carry through the privatization, namely identify the precondition and courses of privatization in network basic industries to achieve the maximal social welfare. The article attempts to bring forward a balanced and fair privatization route. The content includes the mechanism of how the privatization to improve the industry efficiency, how to choose fields to privatize, preconditions of privatization, what are reform routes and suggestions for China network basic industries reform.Firstly, the article discusses how to choose fields to privatize. With the improvement of technology and the expansion of the market, obviously the quality of natural monopoly in network basic industries has already changed thoroughly. Through synthesize the factors, like cost subadditivity, cost sunk, alternative of products and market demand in natural monopoly industry, the article puts forward a new criterion to divide monopoly fields, finitely competing fields and fully competing fields, so as to clearly identify fields in network basic industries to privatize and build basic theory to choose reform routes for privatization.Secondly, the article puts forward two new preconditions of privatization: build living space for private enterprises and establish regulations. Only after divide monopoly fields and competing fields, recompose markets, there will be living space for private enterprises, so as to guarantee the achievements of privatization; meanwhile establish the regulate system, not only assure the reasonable price of state-owned enterprises, but also identify the right and responsibility of enterprises, making for competing.Thirdly, the article puts forward two new concepts: stock privatization and flow privatization and sets two concepts into a model to deduce two crucial conclusions: the efficiency of stock privatization is lower than the efficiency of flow privatization; the social welfare in completely privatization is lower than the welfare in the state which state-owned enterprises and private enterprises coexist. And further deduces a best privatization scheme that is to carry through flow privatization at beginning and deploy both flow and stock privatization later and achieve a coexistent best state at the end. Through compare and analyze the course of privatization in typical countries, although find the best theoretic scheme often cannot be carried through entirely and accurately in practice and every country cannot avoids mistakes and defects, it goes no doubt that best scheme in theory can point a direction for privatization.The article takes China telecom industry for example to emphasize present problems in the privatization: stock privatization slowly, state-owned shares too much, and resistance from technology, policy and economic environment in flow privatization, and further processes a positive analysis to affirm whether the privatization improves the efficiency of China telecom industry.Finally, after draws lessons from foreign experience and combines realistic conditions in China, the article makes suggestions for the privatization in China network basic industries: delaminate and divide fields, expand the routes, equally treat private enterprises and establish related laws and special privatization institutions.