Development and Reform Commission of Heilongjiang Province

Since the reform and opening up, China's service industry has developed relatively rapidly, playing an increasingly important role in the whole national economy and social development. In recent years, the overall scale of service industry in Heilongjiang Province has been expanding, the internal structure has been improved, and the emerging service industry has also developed rapidly. However, from the perspective of economic development trend, the development of service industry is still slow, especially in small and medium-sized enterprises and service enterprises in the private economy. There are many reasons for the slow development of service industry, among which the high barriers to market entry in service industry is an important factor.

entry barriers refer to the obstacles or unfavorable factors that new enterprises that are about to enter or are entering encounter in the process of competing with existing enterprises in the industry. Stigler, an economist at the University of Chicago, pointed out that the entry barrier can be understood as an additional production cost that enterprises planning to enter an industry, rather than existing enterprises, have to bear. The level of entry barriers not only reflects the advantages of existing enterprises in the market, but also reflects the obstacles encountered by new enterprises. It can be said that the level of entry barriers is an important factor affecting the market monopoly and competition in this industry, and it is also a direct reflection of the market structure. In the service industry of Heilongjiang Province, entry barriers are mainly manifested in the following aspects.

1. Administrative monopoly barriers

Taking the telecommunications industry as an example, the State promulgated the Regulations of the People's Republic of China on Telecommunications on September 25th, 2111. This regulation has formulated eight important management systems: the telecommunication business license system, the interconnection regulation system between telecommunication networks, the telecommunication tariff management system, the paid use system of telecommunication resources, the telecommunication service quality supervision system, the telecommunication construction management system, the telecommunication equipment access system and the telecommunication safety guarantee system. Although it is the first time that the regulations allow private enterprises to engage in telecom value-added services such as Internet information services, it also stipulates that the operators of basic telecom services should be legally established companies specializing in basic telecom services, and the company's shares in China are not less than 51%. This regulation not only stipulates the entry threshold of the telecom industry, but also stipulates the price of telecom tariffs. This administrative monopoly with the color of planned economy leads to great loss of social welfare. It is estimated that even if an IP phone card is sold at half price, the telecommunications department can still make a profit of 1.5 times. The actual domestic long-distance cost of China Telecom's IP telephone is only 1.18 yuan, paid in 1.3 yuan; The actual cost of international calls is 1.6 yuan, but it is currently charged in 4.8 yuan. This kind of high profit, from an economic point of view, will attract many enterprises from other low-profit industries to switch to the telecommunications industry, but the actual situation is different. Due to the excessive administrative intervention of the state in this industry, it has formed a high industrial administrative barrier, which makes it difficult for other enterprises and social forces to enter this field for fair competition. As a result, it will inevitably lead to high quality and low price of products, limit the development of the industry and adversely affect the development of the entire service industry.

2. Barriers to economies of scale

Economies of scale are an important variable affecting the market structure, and the relative scale between the output of economies of scale and market demand determines the number of manufacturers that a market can accommodate. The greater the economies of scale, the fewer manufacturers can be accommodated under a certain market demand, and the higher the market concentration.

Scale indicators to measure the level of industrial market barriers mainly include: the ratio of economic scale to the total market size, the amount of necessary capital, the number of patents granted to industries and enterprises, and the proportion of sales amount to the total economic cost. Masu Uekusa, a famous Japanese economist, put forward a method to measure industrial entry barriers by using the level of economic scale obstacles:

The scale obstacle coefficient d = (optimal scale/market capacity) × 111%

The measurement standard put forward by Masu Uekusa is: when d = 11% 25%, the industry is a high scale economic obstacle; When d = 5% 9%, the industry is a high-scale economic obstacle; When d < 5%, the industry is a medium or low scale economic obstacle.

the second measurement method is the profit rate level indicator. Bain's measurement classification standard is: when the sales price is 11% higher than the average cost, the industry that new enterprises are still difficult to enter is a high-barrier industry; When the sales price is 6% 8% higher than the average cost, the industry that new enterprises are still difficult to enter is the industry with higher barriers; When the sales price is 4% higher than the average cost, the industry that new enterprises are still difficult to enter is the medium barrier industry; When the sales price is 1% 2% higher than the average cost, the industry that new enterprises can easily enter is a low-barrier industry.

from the service industry in Heilongjiang province, the performance of scale economic barriers in monopoly service industry is more prominent; In the current economic development, it is difficult for a region to play a greater role in promoting economic development only by developing traditional catering and entertainment services. Some emerging industries need certain economies of scale because of their operating characteristics. If the policy restricts the entry of all kinds of private capital, it will aggravate the role of such barriers and hinder the development of themselves and the whole economy.

third, the barrier of necessary capital

the necessary capital is the production and operation capital that new enterprises must invest in entering the market. The necessary capital of different industries varies greatly due to different requirements in technology, production and sales. The greater the amount of necessary capital, the more difficult it is to raise capital, and the higher the threshold for new enterprises to enter. Take the financial and insurance industry in Heilongjiang Province as an example. The financial and insurance industry takes capital, and the number of funds needed by this industry is far greater than that of other industries. Enterprises that can enter this industry must have sufficient financial strength as the backing to operate.

Table 1 Assets of Financial Institutions in Heilongjiang Province in 2112 Unit: 11,111 yuan

Source: Heilongjiang Financial Yearbook in 2112

As can be seen from Table 1, the assets of the financial industry in Heilongjiang Province all exceeded 1 billion yuan, and the assets of Industrial and Commercial Bank of China even exceeded 1 billion yuan. In other words, if other enterprises want to enter the industry, the total assets must reach at least 111 million yuan. Such a high capital barrier may be beyond the reach of SMEs.

The telecom industry itself is a capital-intensive and knowledge-intensive industry, which determines that it has high capital barriers as well as high technical barriers. For example, the application of broadband access technology, XDSL technology represented by ADSL, has become the main broadband access mode promoted by major operating enterprises because of its objectivity, rationality and low cost, and relying on the huge domestic fixed telephone subscriber line resources. VSDL technology using Ethernet bearer technology is used to provide short-distance high-speed data intervention services for areas with relatively dense users, which has gradually attracted the attention of the industry. In order to tap the potential of the existing network and better provide value-added service applications, major telecom operators are actively developing or applying various value-added service network technologies, such as IP video, MPLSVPN and media browsing. It can be said that in this industry, whoever has the latest and best technology first will have the magic weapon to compete for market share. If other enterprises want to enter the industry, these patents and technologies are an insurmountable gap.

Compared with the above industries, such as community service, catering and entertainment, these industries need less capital and technology, so the barriers for new enterprises to enter this industry are relatively small.

iv. regional barriers

regional barriers refer to external natural and social barriers to entry due to the regional economy, educational level, traffic conditions and historical reasons where the industry is located. Relatively speaking, municipalities directly under the central government, provincial capital cities and special economic zones have faster economic development, relatively complete industries, more opportunities for industry transformation and lower barriers to entry than those in economically backward areas. Take the insurance industry in Heilongjiang Province as an example to further illustrate the influence of regional barriers on the industry.

Table 2 Statistics of outlets of life insurance member companies in the second half of 2113 Unit: China Life Insurance Pacific Life Insurance Ping An Life Insurance Company of China Xinhua Life Insurance Taikang Life Insurance

Harbin 544 178 216 326 174

Qiqihar 341 44 48 118 87

Mudanjiang 411 196 98 191

Jiamusi 184 41 62 1. 11

Daqing 214 46 98 85

Jixi 399 18 47

Hegang 111 96

Shuangyashan 37 164

Qitaihe 38 14

Suihua 179 144 48

Heihe 217 24

Yichun 211 28 < Harbin, Qi, Mu and Jia occupy most of the market share of Heilongjiang life insurance, while Jixi, Hegang, Shuangyashan and Heihe, which are relatively backward in economy, not only have a small market share, but even insurance companies of Xinhua and Taikang have no outlets in this area.

generally speaking, the economic development of Heilongjiang province is relatively slow, and the regional economic development is extremely unbalanced, so the situation of industry development in different regions is not the same. Generally speaking, areas with relatively developed economies have a relatively high degree of market development, better conditions for the development of service industries, and more opportunities for entry; However, in relatively backward areas, the degree of market development is relatively low, and the development conditions of service industry are relatively poor. It is still difficult for existing enterprises to operate, and it is even more difficult for other enterprises to enter this industry. Take the catering industry as an example, Harbin is the capital city, and the catering industry is more than other cities in terms of scale and quantity. Because the economic development of provincial capital cities is obviously faster than that of other cities, and their consumption capacity is also stronger than that of other cities, Harbin has more room to develop the catering industry.

Since the reform and opening up, the economic development and reform in Northeast China as a whole have lagged behind, and compared with the developed coastal areas, the gap is getting bigger and bigger. Recently, the central government decided to implement the strategy of revitalizing the old industrial base in Northeast China, which is a good opportunity for Northeast China. Heilongjiang province should seize this opportunity, do a good job in all aspects, and realize the planning and implementation of the economic development goals in Northeast China as soon as possible. In all aspects of revitalization, accelerating the development of service industry, especially emerging service industry, is a very important content and an important task for the adjustment, upgrading and optimization of the whole economic structure. To this end, we suggest that according to the specific situation and characteristics of Heilongjiang Province, we should try our best to reduce or break the entry barriers of service industry in Heilongjiang Province, encourage small and medium-sized enterprises and various private capitals to enter various service industries, promote the development of service industries, and make contributions to the overall economic development. Therefore, it is suggested to seriously study and take the following measures:

First, reduce or cancel all kinds of market entry barriers of service industry in Heilongjiang Province, and generally form an atmosphere in which enterprises can advance and retreat freely.

second, the government should set different entry barriers according to the characteristics of different industries and guide the rationalization of industrial organizations. Generally speaking, it should be conducive to the entry of private capital and small and medium-sized enterprises, and encourage and support all kinds of capital forces to participate in market competition fairly.

Third, in terms of restrictive conditions such as industry access, standards, etc., administrative intervention should be reduced as much as possible, and the dominant aspect of intervention should also limit monopoly, encourage competition, strive to build a fair and orderly market environment, mobilize and guide the enthusiasm of all parties, and promote local economic development.