Regulation is a public policy approach closely related to calculations of the equilibrium of supply and demand as well as cost-benefit analysis. Governments combine a variety of incentives and restrictions on behaviour, including laws and regulations, in order to lead enterprises and smaller entities within the economy to pursue policies in the public interest.
This book offers an in-depth and systematic review of the economic theory of regulation, with particular emphasis on the Chinese context. The basic concepts cover economic and social regulation, regulatory process, regulation under asymmetric information and capture theory. Drawing from a myriad of cases across the telecommunications, electric power, and water industries sectors since the founding of the People’s Republic of China in 1949, the author explores economic regulation in China with reference to natural monopoly, investment, price level and price structure, entry, and competition. In addition, he discusses theories of externalities and asymmetric information, which are analysed in the light of China’s environmental and product quality regulation. The author argues that the Chinese government has deregulated its economy to a large extent in the past and proposes that the Chinese government will enforce social regulation in the future.
Students and scholars of government regulation, economics, and industrial organization will find this volume to be an essential guide.