One of the key determinants of China's ability to continue its economic growth into the 21stcentury and to distribute the benefits of that growth to a broad spectrum of the population will be the further development of its railroad system. This paper examines the possibilities for improving the performance and increasing the capacity of China's railroad system through the introduction of competition. Countries throughout the world are in the process of abandoning the centralized, monopoly, state-owned model of the railway in favor of models that create competition. However, different competitive models have been proposed and are being tried out. This paper discusses the reform experience with the two basic models and their variations, focusing especially on some of the operational and regulatory challenges that vertical separation is now better understood to impose. It seeks to apply the lessons of the experience to date to the situation of China, where -- unlike in many countries, developing and developed -- one important criteria for choosing a reform model is its ability to provide the incentives for appropriate levels of new investment to be undertaken at the appropriate locations. The paper closes with the presentation of one possible reform model for the Chinese rail system, a model that maintains vertical integration while creating competition for shippers at many important origin and destination points.
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Length: 26 pages Date of creation: 24 Apr 2002 Date of revision: Handle: RePEc:wpa:wuwpdc:0204004
Note: Type of Document - ; prepared on PC; pages: 26 ; figures: 4 maps included at end of paper Contact details of provider: Web page: http://129.3.20.41
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Find related papers by JEL classification: L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology R48 - Urban, Rural, and Regional Economics - - Transportation Systems - - - Government Pricing; Regulatory Policies
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Jean-Jacques Laffont & Jean Tirole, 1994.
"Access Pricing and Competition,"
Working papers
94-31, Massachusetts Institute of Technology (MIT), Department of Economics.
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