Author(s)

Minhe Zhang

Corresponding Author

Minhe Zhang

Abstract

In November, 2012, the author published an article titled Research on Regulating the Industrial Structure of Online Shopping Platforms in China in the journal of Contemporary Economics. In this article, a new idea on government regulation is proposed: the government can "establish an interconnected Internet center which is similar to UnionPay; a variety of payment platforms can be connected with this center. The Internet center provides credit guarantee and fund security services for both parties of the transaction." Coincidentally, in March 31, 2017, the Internet center "NetsUnion" started its trial operation. 7 units under the guidance of People's Bank of China holds 37% shares; 29 third party payment institutions hold 63% shares. They jointly invested 2 billion yuan to build the network platform. In this paper, the author employs the Theory of Contestable Markets again to analyze that after the establishment of network center, how can the government further help real economy enterprises to reduce the sunk cost of establishing electronic commerce platforms, how to make the monopolized e-commerce industry to become a competitive industry, and how to help more e-commerce enterprises to take shape and develop healthily. For the monopolistic e-commerce platforms, more effective regulations from the government are needed.

Keywords

Theory of Contestable Markets, network center, e-commerce industry, government regulation.