The Impact Of Competition Policy On The Integration Of Service Industry Between Hong Kong And The Mainland China

The trade in goods between Hong Kong and the Mainland has basically been liberalized under the existing policy framework.In order to promote the integration of the service industry between the Mainland and Hong Kong,the implementation of CEPA supplemented the "Trade Agreement on Services" in 2016 and the implementation of a "negative list" system for cross-border flows of services,marking that the mainland has opened up most of the service sector to Hong Kong.However,due to the "system-intensive" characteristics of the service industry and the impact of the differences in competition policies between the mainland and Hong Kong,service trade is subject to government supervision of the service industry and the exclusion of new entrants by monopoly enterprises.Since the existing CEPA has not established a cross-border competition policy coordination mechanism,there is no regulation on restricting competition from enterprises,and there is no restriction on the government's behavior to distort the market mechanism,the market entering problem has been solved but the market landing problem include system docking and mutual recognition of regulatory standards still remain.Therefore,the integration of the service industry between the Mainland and Hong Kong is still facing hidden barriers.In the construction of regional economic integration,the coordination of competition policies can help reduce hidden barriers,regulate the monopoly and regulatory heterogeneity of the original market,and promote the in-depth development of market integration within the region.Therefore,this article believes that uncoordinated competition policies hinder the integration of the service industry in Hong Kong,and verifies the above views through empirical analysis.In the selection of empirical methods,this article uses the theoretical framework of the law of one price,uses the price method to describe the arbitrage mechanism and circulation efficiency of the Hong Kong mainland market to evaluate the degree of integration,and describes the cross-border circulation brought by the improved iceberg cost model Quantitative analysis of the hidden costs,the specific practices are as follows.Firstly,this article selects 12 kinds of service commodities price index in Hong Kong and the 14 provinces in the Mainland from 2001 to 2008.As for control group,we select 8 kinds goods in the same period and the same region.Calculate the price index into the relative price volatility index and use the Law of One Price evaluates the degree of integration of the service industries between Hong Kong and Mainland.Secondly,this article uses dynamic panel data to estimate the trend changes and influencing factors of the service commodities and goods commodities in Hong Kong and the Mainland affected by competition policies.Thirdly,the sub-sample data is used to estimate the evolution in the face of competition policy difference.Finally,the cross-sectional data of the sub-sample is used to estimate that different types of commodities affected by the inconsistency of competition policies.The empirical results show that:(1)The degree of integration of the service industry between Hong Kong and the Mainland is less than the degree of integration of goods and commodities;(2)Both service trade and trade in goods between Hong Kong and mainland provinces are affected by differences in competition policies.Uncoordinated competition policies have caused price differences between the two places to fluctuate,deviating from the law of one price;among them,the competition policy coefficient of service goods is greater than that of goods.,Which shows that service goods are affected by uncoordinated competition policies,and their cross-border flows are more affected;(3)With the deepening of regional economic cooperation,the uncoordinated competition policy between Hong Kong and the mainland has an increasing impact on the service industry.At this stage,the solution of the uncoordinated competition policy between the two places is imminent;The impact of policy inconsistency has weakened,and the geographical distance no longer constitutes a factor in the market segmentation.This shows that the trade in goods has achieved liberalization under the framework of the zero tariff policy of CEPA and a series of agreements;(4)Among the service projects in the Mainland of Hong Kong,hydroelectric fuel,city transportation,education services,entertainment services and tourism are significantly affected by the uncoordinated competition policy;among the cargo projects,only tobacco and alcohol rely on competition policy coordination;(5)The coordination of competition policies between Hong Kong and the Mainland is urgent.Based on the empirical results,it can be considered that the inconsistency of the competition policy between the two places increased the cost of cross-border circulation of service trade and affected the integration of the service industries of the two places.Finally,this article puts forward policy recommendations on the regulation of the competition policy of the service industry,and offers suggestions for deepening the coordinated development and further promoting the marketization reform of the service industry.