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Chinese Domestic Market Fragmentation: Reasons and Solutions

Author: Li
Tutor: ZouZhengFang
School: Renmin University of China
Course: National Economics
Keywords: Regional Market Segmentation Inter-provincial trade barriers Local government
CLC: F123.9
Type: Master's thesis
Year: 2005
Downloads: 432
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Abstract

Since the reform and opening up, China's economy has made noteworthy achievements, especially since its accession to the WTO, the Chinese economy has increasingly become an important part of the world economy. However, in China at the same time committed to the gradual reduction of import tariffs and foreign import tariffs has been constantly reducing domestic but such a discordant note - the regional market segmentation. Moreover, according to the estimates of some foreign scholars, since the reform and opening, the phenomenon of inter-provincial trade barriers worsening declining proportion of inter-provincial trade, the high level of tariffs in some provinces, and many sovereign states between the high The tariff level par, this phenomenon is contrary to WTO rules affect the orderly operation of the market economy in China. The regional market segmentation in the reform process, the local government for the protection of self-interest, taken by a local protection measures. The main interests of local governments in order to a country within the local administration and other regulatory instruments to restrict foreign resources into the local market or limit local resources to flow to the behavior of the field definition. The local protectionism phenomenon can be said as a result of the game between local government. \The major issues of reform and development. This phenomenon will directly or indirectly affect the implementation of various economic policies effect the adjustment of industrial structure and inter-provincial division of work, so study the domestic market segmentation of this phenomenon, to find the motivation and gradually be resolved, promote the healthy and stable development of our economy has important significance. The purpose of this research is to clarify the origin of the regional market segmentation through the system, development theorists point of view, the problems faced parse the pros and cons of the domestic market segmentation, and then from the point of view of economics, and then put forward our governance regional market segmentation of the corresponding countermeasures, so that eventually prompted this issue as soon as possible to resolve. The logical structure of this paper is divided into five chapters, the first chapter is the introduction part, major overview of the current situation of China's regional market segmentation study the problem of theoretical significance and practical significance, purpose and methods. Chapter II first summarizes domestic and international theorists of regional market segmentation research and a variety of viewpoints, basically speaking, most of the Chinese and foreign scholars recognize China present a certain degree of regional market segmentation situation followed in order to estimates the current degree of market segmentation in China region severity of this article by contacting the price, the three regional barriers to trade and transport situation, try to establish an inter-provincial trade barriers, the degree of measurement model. Price Index from 1978 to 2003, and the provinces, then substituted into the distance coefficient (including the relative ease of the straight line distance factor and traffic department lt; WP = gt; calculate number), which made the situation of the domestic market segmentation in the nearly 20 years since a quantitative analysis in order to analyze the extent and trend of China's domestic market segmentation, and finally make some conclusion to make some explanation and some error. Chapter qualitative analysis of the causes of China's domestic market segmentation, mainly divided into three aspects: historical factors, including the transformation of the planned economic system to a market economy, traditional economic system under the industrial layout and regional economic strength difference of three parts ; after the reform and opening up the administrative system of separation of powers, including the decentralization of corporate jurisdiction, fiscal and tax reform and investment and financing system of three parts; Finally, some other causes, including overstaffing of government agencies, local financial difficulties, inadequate laws and regulations, law enforcement inadequate and inappropriate places cadre appraisal system of three parts. Chapter from the three main aspects of the causes of our regional market segmentation system analysis, you can see three types of reasons influence each other, and jointly promote the emergence and worsening of the regional market segmentation. Chapter use of the Game and customs union theory of economics parse our regional market segmentation, the first use of the Prisoner's Dilemma model explains taken between the inter-provincial market blockade of motivation, taken in similar regions and different types of regions corresponding strategy , then the use of a customs union theory break regional market segmentation in China, the establishment of a unified market in the welfare effects, including static effects and dynamic effects of a variety of effects. Chapter deal with the domestic market segmentation, first draws on the experience of Western developed economies, the United States and Europe, the measures taken in the economic system, the formulation of policies and regulations, and the implementation of the above, and then according to the characteristics of domestic, corresponding several countermeasures to complete the conversion of the economic system and the transformation of government functions; deepen fiscal and taxation systems, improve the local tax system, improve the tax-sharing; improve laws and regulations, strengthen law enforcement efforts to implement; establish inter-the administrative regional coordination management institutions, improve the regional cooperation rules and other related policy recommendations. Through this research and analysis, informed that the regional market segmentation of this phenomenon, formed by non-overnight, nor can be resolved in the short term, its the emergence of a deep historical roots, and solve mainly gradual means, step-by-step elimination of market segmentation appear various factors, the focus of this article is to analyze the to induce regional market segmentation types of factors, and tackle, respectively, corresponding countermeasures. Needs to be emphasized in these responses, which summed up in two points, truly establish and improve First, the market economy system, the second is the financial and tax system reform and improve.

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