Government Control of Market Access in政府控制的中国市场准入.pdf

Government Control of Market Access in China Zhou Qiren, Professor Center for the Study of the Chinese Economy, Beijing University China Austrian Review August 2001 Source: The control by the Chinese government over the right to access the market is the most important factor affecting China’s economic growth. I remember one time when I was hustled by a youth just outside of the gate to Beijing University to buy a pirated CD disk. I said to him that it would be a terrible thing for him if he were caught; that he would be incarcerated for hard labor for several months and asked why he would still take such a big risk. He threw back at me, “Well, in today’s world, legal businesses can’t make money, those businesses that can make money are not legal.” That was a more concise conclusion than what we economists can draw. Can it really be true that our economy can only prod along by selling fake college degrees and pirated disks? My answer is negative. In China there are still many businesses that have great profit potential, but the government has monopolized these profitable businesses. The free- market-oriented general public does not have access to them. In this regard, the American experience can be telling. After the Star Wars program was grounded, the unemployment rate in Los Angeles reached as high as 12%. At the time, there was a comprehensive surplus in U.S. manufacturing. How did the Americans walk out of that pit? A very important measure was to open up the services industry. First, they opened up the sky by introducing competition into the airline industry, followed by the introduction of competition in telecommunications, power, and all the way up to municipal administration and public interest projects. Those industries traditionally were monopolies, or those so-called naturally monopolized industries, were all opened to the free market. As a result of free competition, both revenue and employment shot up. China’s own experience ha