Natural Monopoly Industries In China, Market-oriented Reforms

China is at the transitional period with a fast development of urbanization and industrialization. A significant development of natural monopoly industry is vital to improve the structure of the economy and to raise the level of people's living standards. The issue of realizing the synchronization between economic targets and social targets through raising corporate efficiency has always been important to the growth of industry.There is a better corporate performance to provide product by one natural monopoly company characterized by scale economy and scope economy industry. However, it results two problems. One is that how to limit monopoly power, which will damage consumer's benefit, and the other problem is how to deal with the low efficiency caused by monopoly operation. With the development of regulation theory and monopoly industry, the study both starts with the matter mentioned above. The analysis of the former one reflect on the evolution from regulation to deregulation, and the studies on the latter one reflect on the enterprise governance structure shifted from privatization to nationalization and finally to privatization again.In view of the current state of affairs, we have had a clear direction of reform towards monopoly power regulation. An effective regulatory system involving price and service has been being formed while operating efficiency still remains problems. We should raise our concern to these problems such as how to distinguish the characteristics of efficiency in state-owned enterprise, whether it is necessary to adopt share diversification in strong natural monopoly industry, what is the proper ownership structure to enhance the efficiency of natural monopoly corporation and so on.Based on these, the article carries on the ownership concentration and ownership structure to listed natural monopoly enterprises in China. Using the datum of listed companies, the empirical analysis result indicates that the largest shareholder index and counterbalance index both have significant influence on corporate performance, board of supervisor index has a significant positive correlation with corporate performance, etc. Besides, this article considers the reform experience of western developed countries,which is worth China learning. All in all, the paper indicates that China should construct the model of corporate governance on the basis of share ownership structure of moderate intensive degree. Therefore, it is key for marketization in China under the regulatory framework of natural monopoly industries to combine internal control with external regulation.