Industrial Restructuring in Economic Transition Tutorials: A Case Study of the Tobacco Industry

Author: Liu Wei
Publisher:
Publish Date: 2005-11-01
Features: This book takes the tobacco industry as an example to study the issue of industrial restructuring during the economic transition period and draws some general and meaningful conclusions. The overall logic of the paper is as follows: At the beginning of the economic transition, to overcome the problem of insufficient incentives under the planned economy, it is inevitable to implement "decentralized" reforms, thereby increasing the autonomy of local governments and enhancing their enthusiasm for developing the local economy. Establishing local enterprises can not only increase local tax revenue but also address local employment issues. As a result, various regions rushed to establish enterprises. The inevitable outcome is an oversupply in the entire industry. To avoid fierce competition among enterprises, local governments then chose to seal off their markets to maintain the survival and profitability of local enterprises. On one hand, there is market segmentation and redundant construction; on the other hand, there is a sharp decline in industrial concentration, with inefficient and enterprises of varying scales coexisting in the same industry, leading to the entire industry being inefficient. Under the severe suppression of market forces, moderate intervention by the central government is necessary. This book is a monograph by Dr. Liu Wei on industrial restructuring during China's economic transition. It takes the tobacco industry as an example to explore industrial restructuring in depth. The main contents include: the evolution and review of industrial organization theory, the characteristics and current status of the tobacco industry's industrial organization, and the industrial restructuring in the tobacco production segment. The book adopts empirical research methods, using mathematical models and quantitative analysis. Its findings provide insights for macro-level reforms in China's economy and serve as a reference for micro-level industrial restructuring.