Study On Excessive Competition Of China Socialist Market Economy

Excessive competition means the phenomena in which surplus bodies participate competition in a certain industry, and supply surpasses enormously demand, and profits are reduced, all of those lead to less efficiency and waste of social resources. Recently, many of our industries have encountered excessive competition.Excessive competition remains the normality of economy competition and will exist in the long run, although it lacks efficiency. Excessive competition is the mediacy when competition develops towards monopolistic competition. It is also a tache during the formation of market value. Meanwhile, it brings about substantial damage to the market, and hampers innovations. The effects of both sides should draw our attention.The cause of excessive competition is mainly enterprises?blind entry and not adjusting economy structure promptly, as well as the difficulties encountered by enterprises?withdraw. In order to handle excessive competition, on the one hand, we should stimulate demand, such as developing rural market .On the other hand, we should enhance efficient supply to eliminate structural conflict of supply. Excessive competition is the signal of market failure, and preventing it requires strengthening the role of government. It is the obligation of government to provide enterprises a fine market environment, to adjust and regulate the industries facing excessive competition, and to offer a outlet for enterprises withdraw.The article explains the definition of excessive competition, and discusses generally the background, the harm, and the cause of excessive competition which emerges in some industries. Finally, it also presents some concrete measures concerning how to prevent excessive competition.