Comments on Sun Tianfu “Consumer angst over reform of China’s age-old salt monopoly”, 13/02/2010, http://www.eastasiaforum.org/2010/02/13/consumer-angst-over-reform-of-chinas-age-old-salt-monopoly/
Noted that this is a translation, I would like to point out that some context may be missing.
The monopoly the author talks about is meant to be State monopoly, but not the normal monopoly in economics where there is only one firm to supply a product or in an industry.
As the article mentions that there is a salt industry association and there were at least 28 major companies in the industry.
In this case, it is still unclear how the State monopoly works, given that there also appears to be private companies, as the article mentions.
Showing posts with label monopoly. Show all posts
Showing posts with label monopoly. Show all posts
2009-10-06
This shows how unwise the Rudd/Conroy Telstra policy is
Comments on "DEALS TV: Dead ringers", 6/10/2009, http://www.businessspectator.com.au/bs.nsf/DealsTV?ReadForm&vid=1628133&vidkey=08f9b61c9750d8596b57&
From the introduction one immediately realises how the small minded Australian government and its regulatory body the ACCC have done to damage the well beings of Australians by unwisely restrict Telstra's hand and strategies.
The Australian government should catch up with the modern economic and business reality and learn how to live with monopolies and supersized multinational firms, including Australia's own ones. The key is how to regulate their activities and prices and behaviours, as opposed to heir structure from an outdated view in the past.
It is a video doc and its introduction reads as:
Telstra Corp, News Corp, Shanghai Media Group, Telenor, BSNL, Zain, Myer, AIA, Volvo
Media and telco deals in Asia, Europe and the US are a painful reminder of the upside Telstra will miss out on by structurally separating. Elsewhere, Myer, AIA and Volvo are in the news.
From the introduction one immediately realises how the small minded Australian government and its regulatory body the ACCC have done to damage the well beings of Australians by unwisely restrict Telstra's hand and strategies.
The Australian government should catch up with the modern economic and business reality and learn how to live with monopolies and supersized multinational firms, including Australia's own ones. The key is how to regulate their activities and prices and behaviours, as opposed to heir structure from an outdated view in the past.
It is a video doc and its introduction reads as:
Telstra Corp, News Corp, Shanghai Media Group, Telenor, BSNL, Zain, Myer, AIA, Volvo
Media and telco deals in Asia, Europe and the US are a painful reminder of the upside Telstra will miss out on by structurally separating. Elsewhere, Myer, AIA and Volvo are in the news.
2009-09-19
Conroy needs to learn how to live with and regulate a natural monopoly
Comments on Michael Stutchbury "Telstra break-up may stifle innovation", 19/09/2009, http://www.theaustralian.news.com.au/story/0,25197,26093486-5017771,00.html
Michael Stutchbury's article touches the problems with Rudd/Conroy's poor approach to NBN and Telstra.
Australia is too small to break up a telco monopoly in some field of the industry. It is not just the competition but also the costs and innovation, investment etc that a government has to consider.
It is all too easy to break a natural monopoly. But that is not necessarily the best public and economic policy.
Government has to learn to balance competition and other economics. It has to learn how to live with and regulate a natural monopoly such as Telstra.
What Conroy announced continues the Rudd government's economic incompetency.
That is unfortunate for Australia and Australians. It will not only disguise the poor economics of the government's proposed $43 billion NBN, but also make the telco industry in Australia less competitive and more costly to consumers.
Michael Stutchbury's article touches the problems with Rudd/Conroy's poor approach to NBN and Telstra.
Australia is too small to break up a telco monopoly in some field of the industry. It is not just the competition but also the costs and innovation, investment etc that a government has to consider.
It is all too easy to break a natural monopoly. But that is not necessarily the best public and economic policy.
Government has to learn to balance competition and other economics. It has to learn how to live with and regulate a natural monopoly such as Telstra.
What Conroy announced continues the Rudd government's economic incompetency.
That is unfortunate for Australia and Australians. It will not only disguise the poor economics of the government's proposed $43 billion NBN, but also make the telco industry in Australia less competitive and more costly to consumers.
2009-09-16
Rudd government damages Telstra shareholders
Comments on Peter Swan “Rudd playing Ned Kelly with Telstra”, 16/09/2009, http://wl.theaustralian.news.com.au/story/0,25197,26078850-7583,00.html
I have branded Conroy as an economic terrorist. His action is no different from terrorists' destroying the World Trade Centre twin towers, given its damages to Telstra and so many of its shareholders.
There is no justification for any government or politicians to cause material damages to a company or shareholders.
Telstra and its shareholders are justifiably entitled for appropriate compensation and should nail the government in court.
Telstra also needs to bring the ACCC for its adversary effect on Telstra's profits over the past many years by excessively depressing its prices
I have branded Conroy as an economic terrorist. His action is no different from terrorists' destroying the World Trade Centre twin towers, given its damages to Telstra and so many of its shareholders.
There is no justification for any government or politicians to cause material damages to a company or shareholders.
Telstra and its shareholders are justifiably entitled for appropriate compensation and should nail the government in court.
Telstra also needs to bring the ACCC for its adversary effect on Telstra's profits over the past many years by excessively depressing its prices
2009-09-15
Conroy's heavy hand on Telstra is showing now
Comments on Stephen Bartholomeusz “Conroy's Telstra ultimatum”, 15/09/2009, http://www.businessspectator.com.au/bs.nsf/Article/Conroys-Telstra-ultimatum-pd20090915-VW3YV?OpenDocument&src=sph
The government and Senator Conroy have been acting like an economic terrorist, as a revenge to Telstra's hard tactics in the past! They are forcing Telstra to separate.
That does not show true government leadership in economic management. Instead, it shows how small their minds are.
They need to go back to school to learn more economics and how to live with a natural monopoly in a small country in a sophisticated economic world where efficiency may dictates the size of businesses.
ACCC has been very disappointing in this regard for too long as well.
The government and Senator Conroy have been acting like an economic terrorist, as a revenge to Telstra's hard tactics in the past! They are forcing Telstra to separate.
That does not show true government leadership in economic management. Instead, it shows how small their minds are.
They need to go back to school to learn more economics and how to live with a natural monopoly in a small country in a sophisticated economic world where efficiency may dictates the size of businesses.
ACCC has been very disappointing in this regard for too long as well.
2009-09-14
Both government and its regulator ACCC should be fair and know what is fair
Comments on Stephen Bartholomeusz “Levelling Telstra's playing field”, 14/09/2009, http://www.businessspectator.com.au/bs.nsf/Article/Levelling-Telstras-playing-field-pd20090914-VV5KU?OpenDocument&src=sph
Both the government and the ACCC should not act as big brothers and ignore the economic reality.
They should not artificially change the underlying economics of its NBN versus Telstra's copper net through government regulations and destroy the value of the copper net.
The ACCC had always acted in an anti-economics manner, by artificially lower the price Telstra could charge. A consequence of that has been the lack of investment by the private sector on new a net, so the government has to step in and intervene.
The ACCC should learn how to regulate a monopoly so it does not abuse its market power, but the market will allocate the most appropriate resources to the sector as well.
Both the government and the ACCC should not act as big brothers and ignore the economic reality.
They should not artificially change the underlying economics of its NBN versus Telstra's copper net through government regulations and destroy the value of the copper net.
The ACCC had always acted in an anti-economics manner, by artificially lower the price Telstra could charge. A consequence of that has been the lack of investment by the private sector on new a net, so the government has to step in and intervene.
The ACCC should learn how to regulate a monopoly so it does not abuse its market power, but the market will allocate the most appropriate resources to the sector as well.
2009-06-23
Questions for Harry Clarke on national interest
These are some questions that I posed to Harry Clarke as comments to his article / blog "More on Rio, BHP-Billiton & Chinalco’s rejected love", or reply to his questions for me, 9/06/2009, http://www.harryrclarke.com/2009/06/09/more-on-rio-bhp-billiton-chinalcos-rejected-love/
I have commented on this article before. But Harry asked me to demonstrate my argument agaist his argument that the use of the Cournot Nash model is right in this case. Here are my questions.
hc, some quick points to discuss with you. First how do you define national interest clearly so that whoever is reviewing foreign investments can apply it consistently across the board?
Second, is your argument of monopoly power by Australia correct or informed as it should be? Both Rio and BHP say they would market their shares of iron ore production separately that seems to contradict your argument.
Third, is either Rio or BHP wholly owned by Australians, so Australia has the monopoly power? If they are not, why an increase in Chinalco's share in Rio would reduce any monopoly power that Australia has?
In terms of models, why is the Cournot-Nash story right in this case? Isn't the case that that model assumes perfect competition on the demand side? If that is the case, is that consistent with your argument of monopsony power demand? If you have monoply powers on both the supply and demand side, why is that model applicable?
I have commented on this article before. But Harry asked me to demonstrate my argument agaist his argument that the use of the Cournot Nash model is right in this case. Here are my questions.
hc, some quick points to discuss with you. First how do you define national interest clearly so that whoever is reviewing foreign investments can apply it consistently across the board?
Second, is your argument of monopoly power by Australia correct or informed as it should be? Both Rio and BHP say they would market their shares of iron ore production separately that seems to contradict your argument.
Third, is either Rio or BHP wholly owned by Australians, so Australia has the monopoly power? If they are not, why an increase in Chinalco's share in Rio would reduce any monopoly power that Australia has?
In terms of models, why is the Cournot-Nash story right in this case? Isn't the case that that model assumes perfect competition on the demand side? If that is the case, is that consistent with your argument of monopsony power demand? If you have monoply powers on both the supply and demand side, why is that model applicable?
2009-05-20
Live with monopolies in modern time - the case of Telstra
Comments on Alan Kohler “Telstra's costly mistake”, 20/05/2009, http://www.businessspectator.com.au/bs.nsf/Article/Telstras-costly-mistake-pd20090520-S7SL4?OpenDocument&src=sph&alerts&loc=center
Alan, with due respect, I tend to disagree with you on two of the main points why Telstra should be split up. You mentioned that your main reason, “the reason”, is it has shown itself incapable of operating effectively as an integrated Telco, looking after both sets of customers. A firm is supposedly to maximise profit for its shareholders. How they conduct themselves to achieve that goal is their own businesses. If it is in their own interests to look after their customers, they will do that. If they don’t, they will not be able to achieve their maximum profits. Their main accountability lies in with their shareholders. If they do look after their shareholders interests, the management will be voted out of their jobs and will be replaced by others.
While government may have a role in looking after consumers, small businesses, they should do so with a clear framework. They should regulate according to well established principles. Similar to the case of Robin Hood, the government should not just bash big firms if there are problems between them and others. They should not take it as granted that big businesses are generally in fault when there is a conflict with others. That is ideological but irrational. That is a popular approach but an inefficient and unfair one. Government should have constraints to its behaviour too. It should not regard itself as above everyone and everything with free will to do whatever it wants or wishes to.
The other point is the so called “some theoretical regulatory preference” to do so. The key issue in this case is the existence of a monopoly in a market. What is it better to split an integrated company just because it operates both as a wholesaler and a retailer? To split it up into two, a wholesaler and a retailer, does not solve the case that the wholesaler is a monopoly. The government will still be faced with that monopoly and have to regulate its pricing, and possibly its conduct with regard to potential new comers. Telstra has been regulated heavily in terms of its wholesales pricing. In this particular regard, one may say that the government/ACCC has been too heavy-handed to Telstra in its pricing so that it discouraged new investments in the Telco infrastructure sector. So what else would the government do to further lower its wholesale price when Telstra is split up? Otherwise how can the government make the whole system better in terms of the price received by customers?
We need to approach regulatory issues rationally. It is equally intolerable to behave as a big brother; no matter it is a big company or a government. All firms, irrespective their size, should all have equal rights, similar like human rights. They should be respected, not violated at some people/government’s free will with little constraint.
Australia is relative small by international standard. When firms grow, it is inevitable that we will see some big ones or very big ones. If that is a result of efficiency, be it. We have lived with monopolies in the past. We should be able to live with some more of them in the future. We should not be intimated or even scared by big firms. We should re-examine the theoretic underpinnings of regulatory frameworks to enhance the welfare of all Australians. If big firms can do that, let them do it. If we have to regulate them, let’s follow well established international standards.
Alan, with due respect, I tend to disagree with you on two of the main points why Telstra should be split up. You mentioned that your main reason, “the reason”, is it has shown itself incapable of operating effectively as an integrated Telco, looking after both sets of customers. A firm is supposedly to maximise profit for its shareholders. How they conduct themselves to achieve that goal is their own businesses. If it is in their own interests to look after their customers, they will do that. If they don’t, they will not be able to achieve their maximum profits. Their main accountability lies in with their shareholders. If they do look after their shareholders interests, the management will be voted out of their jobs and will be replaced by others.
While government may have a role in looking after consumers, small businesses, they should do so with a clear framework. They should regulate according to well established principles. Similar to the case of Robin Hood, the government should not just bash big firms if there are problems between them and others. They should not take it as granted that big businesses are generally in fault when there is a conflict with others. That is ideological but irrational. That is a popular approach but an inefficient and unfair one. Government should have constraints to its behaviour too. It should not regard itself as above everyone and everything with free will to do whatever it wants or wishes to.
The other point is the so called “some theoretical regulatory preference” to do so. The key issue in this case is the existence of a monopoly in a market. What is it better to split an integrated company just because it operates both as a wholesaler and a retailer? To split it up into two, a wholesaler and a retailer, does not solve the case that the wholesaler is a monopoly. The government will still be faced with that monopoly and have to regulate its pricing, and possibly its conduct with regard to potential new comers. Telstra has been regulated heavily in terms of its wholesales pricing. In this particular regard, one may say that the government/ACCC has been too heavy-handed to Telstra in its pricing so that it discouraged new investments in the Telco infrastructure sector. So what else would the government do to further lower its wholesale price when Telstra is split up? Otherwise how can the government make the whole system better in terms of the price received by customers?
We need to approach regulatory issues rationally. It is equally intolerable to behave as a big brother; no matter it is a big company or a government. All firms, irrespective their size, should all have equal rights, similar like human rights. They should be respected, not violated at some people/government’s free will with little constraint.
Australia is relative small by international standard. When firms grow, it is inevitable that we will see some big ones or very big ones. If that is a result of efficiency, be it. We have lived with monopolies in the past. We should be able to live with some more of them in the future. We should not be intimated or even scared by big firms. We should re-examine the theoretic underpinnings of regulatory frameworks to enhance the welfare of all Australians. If big firms can do that, let them do it. If we have to regulate them, let’s follow well established international standards.
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