Research On The Market Structure And Market Performance Chinese Automobile Industry

With Chinese accession to the World Trade Organization in2001,the protectionand constraints of the government on the automotive industry has gradually opened up.The "Automotive Industry Development Policy" in2004marked that the way ofgovernment’s affection on the auto industry was changing from direct investment toindirect guidance gradually.11later after the accession to the WTO,Chineseautomotive industry has experienced rapid development,however, with the high-speeddevelopment Chinese automobile industry has also suffered, such as domestic market’sslowdown in2004and the financial crisis in2008. So it would make sense that wereview Chinese automobile industry11years later after we entered the WTO.The relationship between market structure and market performance is anunavoidable topic in industrial economics. The traditional SCP paradigms that themarket structure affects market behavior and thus determines the market performance.With the development of industrial economics,new hypothesis that marketperformance affects the effective market structure proposed.This article mainly focus on the relationship of market structure and performanceof Chinese automobile industry through empirical analysis method.The aim of theresearch is to improve market performance by adjusting the market structure ofChinese automobile industry.On the basis of previous research and through the analysis of the situation of theautomotive industry in China from2001to2011, this paper studies the relationshipbetween the market structure and market performance in Chinese automobile industry.Firstly,by using a large number of statistical data this paper makes a clear dynamicanalysis on the market structure of Chinese automobile industry.Analysis shows thatsince the accession to the WTO, the market concentration has been continuouslyimproving,however,compared with developed countries ours are still at a low level.Secondly, this paper analyzes the factors affecting the market structure of Chineseautomobile industry and quantifies these influencing factors through the establishmentof the model. The analysis shows that whin these factors industrial policy is the most obvious one on the impact of market concentration, followed by is the market demand.R&D and the capacity of expansion have negative impact on the concentration of themarket. Thirdly,by selecting indicators of the market structure and the marketperformance, this paper uses EVIEWS software to deal the model of the relationshipbetween the market structure and the market performance of Chinese automobileindustry.The result shows that the affection of the market structure to the marketperformance is obvious,however,the affection of the market performance to the marketstructure is not obvious. Finally, with the establishment of the analysis of the mainfactors affecting the market structure this paper raises recommendations on thedevelopment of Chinese automobile industry.