Need to break monopoly

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BIZCHINA / Macro Economy

Need to break monopoly

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Updated: 2007-06-27 11:12

Private economy deserves fair treatment for prosperity, says a signed
article in China Youth Daily. An excerpt follows:

Zhao Youshan, director of the Petroleum Flow Committee of the China
General Chamber of Commerce, revealed recently that a total of 90 private
oil companies were negotiating with nine transnational oil giants for
cooperation and some 15 companies had already signed agreements.

Why are these private companies willing to be merged with foreign
companies? The monopoly on oil exploitation and imports by large
State-owned oil companies is the major reason behind private companies
choosing to retreat.

China opened up its oil market this year. But the Measures for
Administration of the Market of Processed Oil further lifted the
threshold for private companies entering the oil market. Among the eight
companies that were granted oil product wholesale licenses this year,
only one is privately-owned. The private sector has been marginalized in
the oil industry.

And it is just a miniature of the private economy's situation in China.
Though experts have been calling for the break of monopoly and the State
has issued policies giving more survival space for the private sector,
the situation is not optimistic. Besides the high entry threshold, the
current taxation policies also burden private companies.

The discrimination against private companies has impeded the public from
enjoying high-efficiency services provided by full competition and
hampered the development of China's private sector.

(For more biz stories, please visit Industry Updates)

20071123 Extracted from http://www.hellomandarin.net