Research On The Influence Of FDI On China’s Security Of Industrial Organization

As development of world economic, during the developing country,China has become the largest country in using Foreign Direct Investment (FDI). In the world ranking2010, China after USA ranked second in the world. There is no doubt that the growing importance of FDI in China’s economic development, but its negative impacts cause widespread concern. The resulting problem is whether a number of FDI will affect China’s Security of Industrial Organization.Based on the theory of industrial organization, the report analyzed the impact of FDI on the security of China’s industrial organization from three perspectives:structure conduct-performance and took the Electronic Industry as an example. It used the combination of qualitative and quantitative analysis, case studies and comparative analysis method to analyze. Market concentration, entry barriers, R&D cost and profitability were calculated to illustrate the topic. Then combined with comparative analysis, the gap between FDI and Chinese companies was got in above indictors. Meanwhile it analyzed multinational mergers and acquisitions, corporate branding, technical progress, combined with some examples like ADC, the following conclusions can be got:China’s electronic information industry is the atomic competitive market structure, but the huge number of FDI is still a threat to the safety of China’s electronic information industry organizations. And the foreign policy behavior really made the foreign-funded enterprises more strong, meanwhile making the development of domestic enterprises hard to operate. In short, FDI in promoting China’s economic development to some extent, at the same time, it makes inevitable threat to the security of China’s industry organizations. Certainly we must use of FDI, the same time we should focus on improving the competitiveness of domestic enterprises, in order to assure the safety of China’s industrial organization.