Abstract: After the founding of New China, China has implemented a high degree of administrative monopoly. This kind of administrative monopoly has played a positive role in a certain historical period, but its adverse effects can not be ignored. Since the end of1970s, great changes have taken place in the administrative monopoly system in China. This paper attempts to explore the historical reasons for the emergence of the traditional administrative monopoly system in China and the background of its changes since the reform and opening up.
introduce
Generally speaking, monopoly always causes the loss of social welfare and many inefficiencies, so it is criticized by most economists and consumers. The emergence and maintenance of monopoly is usually due to the following reasons: a few manufacturers have special knowledge, technology and investment; The production function of some industries has the sub-additivity of cost within the effective output range; Strategic behavior between manufacturers (such as collusion, etc.). ); The government set up obstacles to the entry of new manufacturers. In recent years, with the competitive market theory widely accepted by economists, administrative monopoly has attracted people's attention.
Administrative monopoly usually refers to the behavior that the government maintains the market monopoly position of some enterprises through laws, administrative regulations or rules and prevents the formation of competitive markets. There are two forms of administrative monopoly: regional monopoly and industrial monopoly, also known as "compartmentalized dictatorship" and "compartmentalized dictatorship". The main characteristics of administrative monopoly are as follows: most of them are wholly state-owned or absolutely state-controlled enterprises; Directly operated by the government, obeying the government in personnel, distribution and management; Monopoly market power comes from administrative legitimacy and legal authorization; The essence of administrative monopoly is to hinder market competition and improve the efficiency of the whole society (Huiyu, 200 1). Under the traditional planned economy system, administrative monopoly exists in all socialist countries, and it appears in a more extreme form-state monopoly.
This paper mainly analyzes the historical background of China's administrative monopoly system, discusses the reasons for the reform of this system since the end of 1970, and tries to look forward to the future trend of administrative monopoly on this basis.
First, the historical roots of the traditional administrative monopoly system
Comrade Mao Zedong pointed out in his report at the second plenary session of the Seventh Central Committee in China on March 5: "The existence of capitalism in China ... will be limited by several aspects-in terms of scope of activities, taxation, market prices and working conditions." In his view, "without the control policy of foreign trade, it is impossible for the people to restore and develop the national economy." ..... Controlling domestic capital and controlling foreign trade are two basic policies of this country in class struggle. As for "controlling capital", Mao Zedong quoted Sun Yat-sen as saying in "On New Democracy" in June 1940: "Big banks, big industries and big enterprises are owned by this country. All domestic and foreign enterprises, such as banks, railways and aviation, which are monopolized or too large for private enterprises, are managed by the state; Let the private capital system not manipulate people's livelihood, which is the essence of controlling capital.
As can be seen from the above quotation, as early as before the founding of New China, the state had decided to strictly control the market access, prices and working conditions of the non-state-owned economy, and the foreign trade of the state was controlled by the state (with the completion of the socialist transformation of private ownership of the means of production, China's foreign trade was monopolized by the state accordingly). The reason why we want to "control capital" (actually the administrative monopoly of the state-owned economy) is to "make the private capital system unable to manipulate people's livelihood", but judging from the policy orientation after the founding of the People's Republic of China, the purpose is not just that. The implementation of these policies is actually a catch-up strategy that serves the priority development of heavy industry.
After the founding of New China, the first generation of leaders chose the strategy of giving priority to the development of heavy industry in view of the international situation and domestic backwardness at that time, as well as the level of understanding at that time and the demonstration effect of the Soviet Union and other countries, hoping to use heavy industry to drive the whole national economy to "catch up with the United States and surpass Britain" in the shortest time. Because heavy industry is a typical capital-intensive industry with a long construction period, it needs a lot of imported technology and equipment. However, the actual situation in China at that time was that there was a shortage of funds and abundant labor force, a shortage of foreign exchange, and a low export earning capacity. Because of the contradiction between economic development strategy and resource endowment, it is necessary for the government to implement a mechanism different from market regulation to artificially reduce the cost of developing heavy industry, and at the same time, it is necessary to improve the government's ability to mobilize resources to ensure that the development of heavy industry can obtain sufficient and cheap raw materials, labor and imported technical equipment. The core of this macro policy, which is suitable for the priority development goal of heavy industry, is to completely reject the role of market mechanism and artificially distort the relative prices of production factors and products. In other words, in order to "catch up", we denied and tried to destroy the market from the beginning.
In order to allocate resources according to the wishes of the government, the state needs to establish a unified purchase and marketing system for major commodities. The extension of this system in the field of foreign trade is foreign trade control, and foreign trade is monopolized by the state. Unified purchase and marketing, foreign trade control and foreign exchange control make the domestic price system completely separated from the international price system, and the domestic resource flow will not deviate from the government guidance because of external price changes.
In order to gain control over the surplus and grasp the direction of accumulation, the state must maximize the transformation of the private economy into a state-owned component (because it is easy to control), so that the state-owned economy is in an absolute dominant position in the national economy. On this basis, the state establishes a unified mandatory production and operation planning system and a unified revenue and expenditure financial system. For the private economy, with the implementation of unified purchase and marketing and foreign trade control, private wholesale and import and export business has disappeared; 1950 after the second half of the year, the state monopolized the banking industry, sealed up and banned securities trading activities, prohibited private foreign exchange operations, and gradually implemented public-private partnerships for all private banks and banks; Around 1953, China began a large-scale socialist transformation of capitalist industry and commerce. Due to the implementation of the above policies and the promotion of mass movements, it only took about three years to realize the joint venture of the whole industry. At this point, the private economy has been difficult to survive.
For civil aviation, railways, postal services, telecommunications and other industries, on the one hand, it was really related to the national economy and people's livelihood at that time, and on the other hand, because of its economies of scale, it certainly served the traditional development strategy, so it was monopolized by the state, and it was a combination of government and enterprises (including militarized management of civil aviation and semi-militarized management of railways).
In order to manage and supervise the operation of the state-owned economy and ensure the implementation of the "catch-up" strategy, the state adopts two main management methods: departmental management and local management. The establishment of state administrative institutions is directly reflected in the establishment of various professional economic management departments. Almost every big industry should have a competent department, as well as supporting departments such as materials, food and prices. The competent department and the enterprises under its jurisdiction naturally constitute an administrative monopoly (because the private economy was eliminated, and the collective economy mainly existed in the primary industry at that time).
At that time, the top decision-makers also realized that the situation in all parts of China was not good, and the highly centralized planned economy system was not conducive to the rapid development of local economy (this was reflected in Mao Zedong's On Ten Major Relationships 1956). From 65438 to 0957, in order to increase the autonomy and enthusiasm of local and enterprises, the central government decided to implement fiscal decentralization between the central and local governments. Because there was no unified big market in China at that time, all regions only relied on planned distribution to maintain domestic economic ties. After fiscal decentralization, the original administrative subordination of enterprises has changed (many enterprises have changed from central to local), the planned distribution of the central government has been weakened, and the connection between production has been in trouble; At the same time, because of the long-term fear of foreign invasion, the central government instructed all regions to seek their own balance and establish an independent and complete national economic system. 1958 after the establishment of seven cooperation zones, namely, North China, Northeast China, East China, Central China, West China, Northwest China and Southwest China, the central authorities explicitly asked them to establish relatively complete industrial systems respectively, and even asked some provinces to find ways to establish independent industrial systems. This "block-based, block-based" planning system is a concentrated expression of the traditional administrative monopoly system, and it is also an important historical reason why China's current administrative monopoly is difficult to break (the problem of regional division has been buried at that time).
Second, the changes and reasons of administrative monopoly since the reform and opening up
Due to the inefficiency of the traditional development strategy and economic system, as well as the changes in the level of understanding and the international and domestic situation, China began the great practice of reform and opening up in the late 1970s, and the traditional administrative monopoly system has also undergone many changes in the past two decades.
As far as the market is concerned, individual and private economy, collective economy and "three-capital" elements have widely entered many fields of the national economy. Some traditional highly monopolized industries have broken or are breaking the monopoly: civil aviation has successfully separated government from enterprises, local airlines compete with airlines affiliated to the central government, and airports are gradually being handed over to local operators; In the telecom industry, with the establishment of telecom operators such as China Unicom and Tietong and the successful spin-off of the former China Telecom, the monopoly pattern of China Telecom has been initially broken. In terms of railways, there have been many local railways such as Sanmao and Guangmeishan. In the financial field, not only the number of state-owned banks has increased, but also many private, foreign-funded and joint-stock banks and non-bank financial institutions have emerged. In the field of foreign trade, the monopoly of foreign trade has been initially broken, and a large number of state-owned, Sino-foreign joint ventures, joint-stock companies and private foreign trade companies compete on the same stage.
The author believes that the reform of administrative monopoly since the reform and opening up is mainly due to the mutual promotion of the following factors: financial pressure, inefficiency, rent-seeking and corruption in monopoly industries, competition of local governments in the reform of fiscal decentralization, external pressure, poor state-owned economic benefits and outstanding performance of private economy.
First of all, the shortage of funds available for economic construction in the government's fiscal revenue makes the government have to rely on various forces to carry out construction. China's electric power, railway, highway construction and management industries have been lagging behind for a long time due to insufficient capital investment, which is far from meeting the needs of economic and social development and has become the "bottleneck" of national economic development. Take the electric power industry as an example. Due to the long-term state monopoly of the power industry and insufficient financial input, by 1978, the total installed capacity gap of power generation in China reached 1 100 million kilowatts, and the annual power generation gap reached about 40 billion kwh. In order to alleviate the shortage of power supply, the party and the government decided to reform the investment and financing system of the power industry. First, local governments are allowed to invest in electricity, and then 1984 clearly puts forward the policy of "multiple companies run electricity and raise funds to run electricity". At the same time, the electricity price formation mechanism of unified on-grid electricity price has been cancelled, and the "debt service price" has been implemented to ensure that investors can get reasonable returns.
Scholars such as Zhang Yuyan put forward that a ruler must maintain a certain degree of justice (reflected in the support of citizens and officials), which requires the government to provide more and more public goods over time. However, the government should be constrained by the budget when providing public goods. When the financial pressure accumulates to a certain extent, the country must seek reform, and the best way to reform is to "get rid of the burden" first. It is also an inevitable choice under financial pressure to open the traditional administrative monopoly departments to various economic sectors and allow them to invest and operate.
Secondly, the inefficiency, rent-seeking and corruption of monopoly industries. Foreign scholars have long discussed and analyzed the inefficiency and rent-seeking of monopoly departments. Hu Angang and other scholars have estimated the rents, welfare losses and illegal charges charged by some monopoly industries in China. The research shows that the rental scale of electricity, transportation, posts and telecommunications, civil aviation and medical care alone accounts for 1.7% 12.7% of China GOP. Although the technical composition of employees in monopoly industries is generally not high, their wages are generally significantly higher than the national average. The average wage of workers in the production and supply industries such as hydropower, civil aviation and railways is 35%- 150% higher than the national average wage (civil aviation), but the labor productivity is pitifully low (1985- 1996, the growth rate of labor productivity in the railway industry is the national average15. Power industry 3/5).
The inefficient and inferior service, high fees and lack of innovation incentives in monopoly industries have long been hated by people. For example, from the founding of the People's Republic of China to 1994, the (basic) telecommunications industry in China-mainly telephones-was monopolized by the Ministry of Posts and Telecommunications, which was a typical administrative monopoly of the industry. Long-term monopoly makes the labor productivity level of this industry extremely low. 1989 In China, there were 87 telecom workers in each trunk line, which was about 0/6 times that of Japanese and 2.5 times that of Philippine. However, consumers generally know that the telecom tariffs in China are extremely high and the service is poor. In recent years, with the initial appearance of the competition pattern, the service quality has been improved and the tariff has been greatly reduced.
Third, the reform of fiscal decentralization has made local governments a promoter of breaking monopoly in some fields. Decentralized financial reform has caused some competition among local governments. In order to attract investment, all localities have lowered the threshold of investment and operation, making foreign capital and private capital. It's more convenient to go in. For their own achievements, local officials are bound to promote local economic development, solve employment and increase fiscal revenue. At the same time, the funds that the government can use for economic construction are very limited, which requires the government to relax market access.
Fourth, economic globalization requires us to break the administrative monopoly. To integrate into the global economic cycle, we must be in line with international standards and participate in international competition according to relatively unified rules of the game. Since the end of 1960s, the major countries in the world have relaxed their control, and there are fewer and fewer areas monopolized by the government, and the barriers to foreign trade have been reduced. In this context, many administrative monopolies in China will be difficult to maintain. With China's successful entry into WTO, foreign capital has entered the traditional administrative monopoly sectors such as banking, insurance, automobile manufacturing, petroleum and education. From the practice in recent years, the introduction of competition has effectively promoted the healthy development of related industries and national economy.
Fifth, the decline of state-owned economy and the sudden emergence of private economy require us to "open to the outside world" at the same time. Because the principal-agent problem of state-owned enterprises is difficult to solve, coupled with other long-term institutional problems, the state-owned economy has been poor in recent years. In 2006, state-owned and state-holding enterprises at or above the provincial and municipal levels realized a profit of 964.4 million yuan, and the total state-owned assets of these enterprises in that year was about 20 trillion yuan. A simple division can be calculated that the profit rate of state-owned assets of these enterprises is less than 5%. Moreover, most of these enterprises profit by abusing their monopoly position. The comparison of labor productivity, cost profit rate, return on net assets and asset profit and tax rate shows that the performance of state-owned economy is far worse than that of non-state-owned economy. From enterprise research and development; D in terms of performance, state-owned enterprises obviously lag behind the private economy. The relative number and absolute number of employees in the state-owned economy are declining. From 65438 to 0978, employees in the state-owned economy accounted for 78% of the total number of employees in cities and towns, and now it is less than 40%; Since 1996, the absolute number of employees in state-owned economy has been declining. It can be said that the non-state-owned economy has played an important role in increasing employment in recent years.
The sharp contrast and the growing non-state-owned economy require the government to break the administrative monopoly and relax the access field of non-state-owned economy.
Third, the outstanding problems in the current administrative monopoly
Although China's administrative monopoly system has undergone gratifying changes in many aspects since the reform and opening up, there are still many problems. For example, regional division, the development of private economy is blocked, rent-seeking and corruption caused by administrative monopoly. In this part, we mainly analyze the first two problems.
Let's take a look at China's regional division. Regional division refers to the use of administrative power by local governments or their functional departments to set up market barriers. On the one hand, it restricts foreign goods from entering the eight local markets, on the other hand, it restricts the flow of goods, raw materials and technologies that are in short supply locally to other places. As mentioned earlier, in the decentralization reform of 1965- 1950, all localities were required to strive to achieve self-balance and establish a relatively complete industrial system, and the problem of "redundant construction" has emerged. Subsequently, in the process of fiscal decentralization, in order to increase fiscal revenue as much as possible, various places have launched industrial projects with quick results and high prices. In this way, it is not difficult to understand the phenomenon of convergence of industrial structure and uneconomical scale of enterprises in various places. In order to ensure that their enterprises can start work normally and their products can be sold, provinces will inevitably adopt a "beggar-thy-neighbor" trade war. At present, China's domestic inter-provincial "tariff" rate reaches 46%, which is equivalent to the trade tariff between the United States and Canada and exceeds the tariff rate between EU countries. No wonder some people ask whether China is "one market or n markets". In the final analysis, regional division is first of all a situation formed by the separation of government from enterprises and the lack of authority of the central government under the background of fiscal decentralization.
Regional division makes it impossible for products and factors to flow freely, resulting in distorted resource allocation and many enterprises that do not have competitive advantages to survive. This kind of regional division is actually a kind of "prisoner's dilemma", which has caused great efficiency loss.
Private economy has become an important driving force for China's economic development. However, there are still many institutional constraints in the development of private economy, most of which are related to administrative monopoly. China has joined the WTO, and many industries have been or will be opened to foreign investors, but we have not yet "opened to the outside world" in the process of opening up. In addition to market access, the financing problem of private economy has always been a big problem that restricts its development, because the financial sector is basically monopolized by the state and discriminates against the state-owned economy. Four. Concluding remarks
China's administrative monopoly originated from the traditional planned economy system. Due to the "catching up" strategy of giving priority to the development of heavy industry, China's resource endowment is contradictory to this development strategy. In order to make the allocation of resources conducive to the implementation of this development strategy, the government has adopted a resource allocation method different from the market. The monopoly of the state on major industries has wiped out the private economy, and at the same time, the state has unified pricing and unified purchase and sale of major products, canceling the autonomy of enterprises. This system played an active role in the early political instability and lack of materials. However, the existence of monopoly will inevitably lead to low efficiency and slow economic development. With the implementation of reform and opening up, many major changes have taken place in China's administrative monopoly. It is mainly manifested in the introduction of competition in some traditional monopoly industries, allowing non-state-owned economies to invest and operate in related industries, and product prices are mainly determined by market demand. The breaking of monopoly not only increases the supply of social products, but also enhances the competitiveness of the whole national economy. The breaking of this monopoly is mainly due to financial pressure, the promotion of decentralization reform, external pressure, the inefficiency caused by long-term monopoly, and the growing influence of non-state-owned economy.
At present, China's administrative monopoly power is still very strong, mainly manifested in the division of domestic regions and the restrictions on the development of private economy. This situation must be broken.