Tuesday, December 12, 2017

Barriers to Fair Competition in China

Yongwei Chen, Peking University Yiqun Ye Peking University - Peking University Law School identify Barriers to Fair Competition in China.

ABSTRACT: This paper analyses three types of barriers that lead to market distortion: market segmentation, industry monopoly and industrial policy. Then we estimate the efficiency and welfare loss caused by these three barriers. The results show that the loss caused by market segmentation and industry monopoly respectively account for 6.42% and 18% of annual GDP. And either market segmentation or industry monopoly has been deeply influenced by industrial policies. We must correct the distortion if we truly want to establish a unified, open market system with orderly competition identified by the third plenary session of the 18th Communist Party Central Committee of CPC. To achieve this goal, we should not only change policies, but reform institutions as well.


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