Three Major Regrets of the Anti-administrative Monopoly Clause

by huabeihu on 2008-08-11 12:35:14

One of the regrets is that it limits the object of administrative monopoly in the field of goods trade. A characteristic of the change in the modern economic industrial structure is that the proportion of the service industry is increasing day by day. If the object of anti-administrative monopoly is limited to the field of goods trade, it is equivalent to abandoning a larger and increasingly important field out of the supervision of the Anti-Monopoly Law.

The second regret is the lack of corresponding fiscal arrangements, which fundamentally weakens the motivation for local protectionist administrative monopolies. Many so-called administrative monopolies belong to the type of local protectionism. The reason why local governments support local protectionism is due to fiscal interest motives, because under the current tax system, government revenue is highly dependent on corporate income tax and value-added tax. Excluding enterprises and their goods and services from other places helps increase the income tax and value-added tax of local enterprises. If the tax system is reformed to increase the proportion of consumption tax, it can fundamentally weaken the motivation of local governments to do so.