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The news that employees in monopoly sectors enjoy much higher salaries than their counterparts in other sectors will be an issue for some time, given the rising anti-monopoly sentiment nationwide. As the national labor regulation body revealed, the salary gap between workers in monopolized and competitive industries is not only stunningly big, but widening rapidly in recent years. Many are wondering why those in monopoly sectors earn much more just for working in that industry, and not for increased hours or higher skill sets. Such a sentiment, if unresolved, will dampen social morale. The government has promised to take steps in the coming five years toward breaking up monopolies, as mapped out in its 11th Five-Year Plan (2006-10). This is the right place to start. In discussing solutions to break up monopolies, anti-monopoly legislation is often proposed, which would likely play a vital role. Indeed, a viable and comprehensive legal framework would equip the nation's anti-monopoly efforts with strong legal support. Most of China's monopoly sectors are state-controlled. It is a legacy of the highly centralized planned economy. This renders the government regulators easier access to information and more convenience in carrying out its supervisory duty. One of the regulatory duties of the government lies in preventing monopoly sectors from taking advantage of their market position to overcharge consumers. A 2000 investigation by central China's Hunan Province's price supervisory department revealed a 163 million yuan (US$20.37 million) overcharge by local power firms to customers. A 2004 audit in central China's Henan Province found its telecom sector overcharged consumers more than 100 million yuan (US$12.5 million). Regulators in those regions were keeping up. It shows that technical barriers or lack of wisdom are not problematic and the government can detach itself with monopolized interests only if it gathers adequate political will. Such a political commitment is indispensable in making the country's anti-monopoly strategies. Encouraging competition, for example, is the ultimate way of breaking up monopolies. But the government sometimes sticks to price controls to tackle the problem, as shown in the medical service sector. Such a methodology may encounter less pressure from monopolized interests, but is less effective in the long run. (China Daily May 19, 2006) |
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