Basic Knowledge of Establishing a Modern Enterprise System in Railways

Author: Chief Editor: Xu Xiaofeng et al
Publisher:
Publish Date: 2003-02-01
Features:
Brief Introduction This book consists of 8 chapters and 163 questions. In addition to discussing the concepts, characteristics, and methods of establishing a modern enterprise system for railways, it also provides detailed elaborations on management systems, property rights systems, financing and investment, financial and accounting systems, asset evaluation and asset management, social security, and technological economics. This book can serve as a learning resource for railway management personnel, as well as a reference for students and faculty in business management majors at universities and researchers.
Excerpt:
Regarding the social benefits of railways, it inevitably raises the question: under conditions where the economic entities of railways have independent economic interests, what rules or systems should be established to ensure that their pursuit of self-interest aligns with social benefits, thereby contributing to the realization of social benefits. The results of economic research and the practices of railway development in various countries have proven that neither a single market nor a single government can guarantee cost-effective resource allocation for railways. Therefore, it is necessary to establish a national macro-control system or a series of supporting economic policies to corporatize a portion of the social benefits created by the railway transport industry, enhance the vitality of the railway transport industry, and accelerate its development and improvement of transportation conditions.
(2) The high degree of concentration in railway transport production. The railway transport industry is a vast, complex machine with numerous points, extensive lines, and a vast spatial footprint. Completing any transportation task cannot rely solely on one department or a single link but requires close coordination and mutual cooperation among all departments, links, and trades across the entire railway network. This has led to a misunderstanding that the high degree of concentration and centralized command in railway transport production is incompatible with the market economy and cannot coexist. In fact, this is two aspects of the same issue. On one hand, the high degree of concentration and centralized command in railway transport production is determined by the production attributes of the railway transport industry, reflecting the relationship between humans and nature, and does not change with shifts in social nature or systems. On the other hand, the market economy is an economic form, a "regulator" and "driver" of socialization, reflecting the relationship between different economic entities. Since the objects they reflect and the scope of their effects differ, they are not mutually exclusive or incompatible. In the market economy, while a high degree of concentration and centralized command is implemented in the internal transportation production process of railway transport enterprises, market economy principles must be followed when dealing with the relationships between railway transport enterprises and other economic entities in society, as well as among railway enterprises themselves.
(3) The monopoly nature of railway transport. This is determined by the inherent characteristics of railways. First, railways are capital-intensive industries, requiring substantial investment and long construction cycles. Due to the large amount of capital needed for construction, investment in railways cannot be made until a certain level of capital accumulation is reached. This hinders the rapid transfer of funds to the railway sector, making competition difficult. Additionally, the long construction cycles mean that the capital invested cannot quickly generate transport capacity or provide transportation products, nor can it change the supply-demand dynamics in the transportation market. The slow increase in supply naturally reduces the intensity of competition among sellers and can easily lead to monopolistic tendencies.
Second, the production of transportation products has strong regional characteristics. For example, transportation products such as Beijing-Shanghai transport can only be produced between Beijing and Shanghai and cannot be generated elsewhere. Moreover, the consumption of transportation products cannot be separated from the production process, unlike other goods that can be produced in one place and transported to another to increase supply in the market. The regional and non-transferable nature of transportation product production slows the increase in supply in the transportation market and limits competition among producers, further exacerbating the monopoly nature of the railway transport industry. Therefore, it is widely believed that railway transport enterprises should not or cannot enter the market. In fact, it is precisely because of the shortage of railway transport capacity and the inherent monopoly characteristics of railways that they need significant development. To achieve this, traditional management systems must be reformed, a modern enterprise system for railways must be established, and competitive mechanisms must be introduced internally, supplemented by macro-control measures such as finance, taxation, credit, and pricing, to adapt to the needs of the socialist market economy.