Labor regulators said the average salary of monopolized sectors
is 7.52 times that of the lowest level of normal industries and the
gap is widening, stoking the public fire against monopolies.
Monopolized sectors, such as power, aviation and energy, have
been frequent targets of public criticism. Meanwhile, the country's
anti-monopoly law has been in the works for a decade.
The hard labor of the law seems difficult to understand, given
that monopolies have seriously affected the efficiency of the
Chinese economy.
As economists point out, a monopoly creates barriers to market
entry, discourages competition, raises prices, and damages the
interest of consumers and the economy as a whole. The ensuing
exorbitant profits also lead to the much-higher salaries of
industrial employees, contributing to social inequality.
We have pinned hope on an anti-monopoly legislation to change
the scenario. It would be unintelligent, of course, to depend on a
single law to make a fundamental change, but such a law can at
least serve as a ram for pushing the opening up of the privileged
sectors.
Currently, the focus has been on the stipulation against
administrative, or government-created, monopolies. It is rumored
that the whole section on administrative monopolies proposed in the
draft law will be cut, with only natural and market-based
monopolies being tackled in the new legislation.
Admittedly, the legislation involves multiple interests. The
proposed cut of the administrative monopoly section may just cater
to the privileged sectors under the umbrella of various
departmental interests.
It reflects the complicated situation in which various interests
interact as China changes from a planned economy to a
market-oriented one. Such a proposal, if it becomes reality, may
smooth the legislation process and facilitate its enforcement, as
it irons out crucial differences.
But it will cause the law miss its target, as government-created
monopolies are the major ailments of China's fledgling market
economy borne out of a planned economy featuring widespread and
in-depth government intervention in economic affairs. There is yet
an explicit demarcation between administrative forces and the
market.
Such an anti-monopoly situation in China is fundamentally
different from that in Western economies, where market-based or
natural monopolies are the major target of legislation.
Brewing the cut of the crucial administrative monopoly section
of the law, legislators may be unwilling to drag out the
legislation process. But the step would be dangerous -- a law that
misses the target is no better than no law.
(China Daily May 16, 2006)