Monopoly Effect Of Transnational Corporations' Direct Investment To China's Market

From last century, accompanying the economic globalization, the transnational corporations (TNCs) have developed greatly. As the carrier of the foreign direct investment (FDI , the development of the TNCs led to sharp increasing of FDI. Being one of the biggest potential markets in the world, China has become the focus of a lot of TNCs to invest naturally. To invest on China's market has already become a kind of strategic behavior of TNCs.The effect of TNCs on economic development of our country is obvious. On initial stage of reform and opening to the outside world, the entry of the FDI broke administrative monopoly existing in China, increased the effective competition of the market. But with the enhancement of marketization and continuous increasing of China's economy, the function of TNCs changed quietly. During the recent ten years, the greatest function of TNCs on the structure of China's market is to lead to real monopoly and potential tendency of monopoly.It is not an accidental phenomenon that the TNCs lead to monopoly. It is the instinct of an enterprise to pursue market monopoly and it is inherent trend that market economy turn from competition to monopoly. Control and monopoly is essential character and direct motive of FDI. The TNCs are only internationalized result and organizational forms of capital of monopoly.The monopoly on China's market of the TNCs mainly relies on their monopoly advantages. Based on advantages in capita1. international organization . advanced technology and management, the TNCs have advantage over domestic enterprises. The TNCs limit free competition behavior of market through their advantages and other means, such as bribe, to obtain the dominant right of the market. After controlling the market, in order to safeguard their monopoly position, they establish high structural and strategic entry barrier to prevent other potential competitors from entering market.Undeniable, monopoly or oligopoly is not only one kind of general and steady market mechanism but also an effective mechanism of resource distribution. However, monopoly itself reduces efficiency of market and leads to unfair and other negative influences. That foreign investors monopolize domestic market will do more harm to China.On the basis of prevention of the loss and remedy of the harm of monopoly, in order to correct the existing monopoly behavior and prevent the TNCs from monopolizing China's market further, we should take actions actively and make corresponding countermeasures.