Regulation And Competition: The Chinese Power Industry Reform Policy Choice

The power industry is a typical network industry and it is considered to be a typical natural monopoly industry traditionally. Governments of most countries carried on strict controls to the power industry in history. With the development of the power industry and the development of natural monopoly theory, the view that the power industry is a typical natural monopoly industry traditionally has already received serious challenges from theory and reality. The paper proves the incompleteness of the natural monopoly of the power industry through analyzing the theory and practice, in other words the natural monopoly of power industry only with some. The power industry should be competitive in more fields.Since the view that the power industry is a typical natural monopoly industry is wrong, the reform to the traditional power industry and to the way of control must be carried on. At the same time, negative effects that government's old control brings are becoming more and more serious. Breaking the monopoly, promoting the competition and strengthening supervision are the inevitable trend in the reform of power industry. After the seventies of the 20th century, the reforms of the power industries of various countries also proved the view.The full text is divided into four partsPart I : Through explaining the development of the natural monopoly theory and industrial organization theory, proves that the traditional natural monopoly theory is challenged seriously, and these theories are the theoretical foundation that think the power industry is the typical natural monopoly industry.Part II: This part expounds the characteristic of the network industry and especially analyses the economies of Scale and Scope economies of network industry, then analyses the incompleteness of the natural monopoly of power industry in terms of network industry further. Through analyzing the Drawback of traditional way of regulation draws the theory of regulation and competition. After the seventies of the 20th century, the countries all over the world carried on network industry's reform one after another: Deregulation, Breaking monopoly andPromoting competition.Part III: The part shows detailed analysis of existing problems of power industry in china focusing on the price, supervision, market segmentation, resource rational distribution.Part IV: There are some suggestions about reforms of china power industry in the part focusing on Supervision, Laws and Regulations, Price , Power market, Demand Side Management, and Universal service in power industry, etc.