Competition And Regulation, Of China's Telecom Industry

The completely competition can assign the resources effectively through the price signal according to the neoclassic economic theory. But this theory is no use in the field of nature monopoly industry. In the nature monopoly industry, the average cost decrease progressively along with the output. So, the smallest effective scale request only one enterprise to provide the product. Thus, we must regulate the nature monopoly industry to avoid the overlap construct which means waste resources. Telecom industry was considered to have the character of monopoly before 80's of 20 century because of the scope economy, asset specificity and scale economy. This idea was changed by the progress of the telecom technology along with western developed country relaxing the regulation of the telecom industry.With the continuously deep-going reform of regulation in telecom industry, the telecom industry rapidly prospered in the western developed country. Under the fashion of relaxing the regulation of the telecom industry, our country has also reformed the telecom industry. Everyone can see the great progress in the telecom industry after we introduce the competition in the telecom industry. But our telecom industry still has very big disparity compare to the developed country. With the coming of WTO agreement, which require our country opening telecom industry, we must improve the competition ability of our telecom enterprises before competition with overseas telecom giant.The intention I write this article is to indicate that more drastic Competition in telecom industry will be a better choice, but the vested interest groups will counteract the process of reform because of their...