| Industrial concentration is one of the major research fields. By using of the data of The Third National Industrial Census in 1995, this paper examined concentration and market structure of 521 manufacturing industries in Mainland China, and explored the relations between concentration and technological innovation, production efficiency and profit rate. On the basis of that, we advanced some policy suggestions.The subject matter of this paper is Market competition, performance and industrial concentration. Generally speaking, industrial concentration is the outcome of market competition and government regulation. Because market competition follows "survival of the fittest" and economic efficiency principles, some enterprises with competitive advantage will expand swiftly and enlarge its market share, which will lead to an increasing industrial concentration. On the contrary, increasing concentration will decrease competitiveness and have an impact on conduct and performance. In order to promote workable competition, the goals of industrial policy will be both anti-excessive competition and antitrust or anti-monopoly.After going deep into entirely examination and studies, we come to some important conclusions and findings:(1) There exists an inverse "U" type curve between industrial concentration and economic development process. That is to say, concentration will trend to increase with the adoption of mass production system at the early and middle stage of industrialization. However, concentration will keep stable when economic development turn into mature stage, and trend to decrease slowly at the succeeding stage.(2) Compared with economically developed countries, concentration of manufacturing industries is very low in China, it presents highly dispersed characteristic. That highly dispersed pattern is closely link with planned economy system and transition of Chinese economy. It leads not only to the loss of scale economy and the emergence of excessive competition, but only to the surplus of production capacity and make against the increase of industrial competitiveness.(3) There existed a process of disconcentration with transition of economic system at the early eighties in China. However, concentration of manufacturing industries has tended to increase with the appearance of buyer's market since middle and evening eighties. Those concentration trends mainly come from furious market competition.(4) Compared with main developed countries, market structure of manufacturing industries presents a characteristic of extremely dispersed type and dispersedly competitive type, and percentage of monopolistic industries is very low. Especially, 52 percent of 521 manufacturing industries belong to typical atomic-type industries. These industries have a very low concentration (Herfindahl Index is less than 200), numerous enterprises, a uniform scale, and excessive marketcompetition. As a result, these lead to a decreasing efficiency of resource allocation.(5) In Mainland China, concentration of manufacturing industries has an important impact on technological innovation and production efficiency. Looking as a whole, there exist stronger innovation ability and higher production efficiency in highly concentration industries, and obvious management inefficiency-that is X-inefficiency in lowly concentration industries, especially in atomic industries.(6) Using the data of 521 manufacturing industries in China, we find there exists a positive correlation between concentration and profit rate. That is to say, the profit rate of highly concentration industries is higher than that of lowly concentration industries. Higher profit rate in highly concentration industries should owe to the barriers to entry, efficiency difference between industries, and market competition. Therefore, increasing concentration through market competition and economic instruments will improve efficiency of resource allocation.(7) In order to protect workable competition and to enhance efficiency, it is necessary to fo...
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