Chinese Consumer Durables Industry, Excessive Competition

Since the 1990s, China's economy which has been shortage for a long time presents excessive competition. Large surplus of products, idleness of production capacity, price wars serious, declining of profitability, and all of these phenomenons characterized by surplus emerge continually. Scholars have conducted lots of theoretical and empirical studies for that , but there are still many issues of concern lost, one of them is: most excessive competition occurred in the manufacturing sector in China, especially in such as TV sets, washing machines and other durable goods manufacturing, instead of food, alcoholic drinks and tobacco manufacturing. And naturally the matter is that: Does the excessive competition take with a selectivity to particular product or industry? Is there any certain inevitable connection between the excessive competition and the characteristics of the product or industry? The thesis attempts to research this problem aspects of the products' commom characteristic—durability which are prone to excessive competition, chosing durable consummer goods industry for the object ,in the hope of providing theoretical fondation for conducting to develope the durable consummer goods industry in China.The thesis first summarizes the relevant literature on the excessive competition, and defines the excessive competition as a low efficiency of the market performance. Then according to the related theory on the durable goods explores the characteristics of the durable consummer goods industry. Next part, the thesis ratiocinates that the durable consummer goods industry has the inherently trend of periodic surplus according to their characteristics, and combinates the analysis about China's "special" market circs, concludes that there is certain inevitability for durable consummer goods industry becoming excessive competition in China. Later, the thesis taking the car industry as a case illustrates Chinese durable consummer goods industry's excessive competition, describing excessive competition's low efficiency in terms of output, prices and profits , and at the same time the empirical analysis has achieved the support for anterior conclusion. Finally, it points out that effective competition is the direction for developing the durable consummer goods industry in China, and given relevant policy recommendations about actions of the government and the enterprises.The thesis' contribution lies that according to the characteristics of the product itself, researching the durability easily trigger off excessive competition, and explored a new angle for the study on excessive competition, also found answers to practical problems that it's prone to excessive competition in the durable consummer goods industry.