Research Of The Influence Geographical Differentiation Of Port FDI On Market Structure

China, as the largest developing country and the largest recipients of foreign investment in the world, foreign direct investment (FDI) enterprise has become an important component of China’s economic development. China for the first time promulgated "Catalogue of Industries for Guiding Foreign Investment "in1995and has gradually relaxed the foreign investment access restrictions after revising five times. Compared with developed countries, the development level of the China port industry is low, while the market potential is enormous. In China, the political, economic and social environments are stable. Especially in2004, China opened up the ownership restrictions of FDI in port area, after that, the gradual opening port industry is becoming one of the key industries to attract FDI. There is showing a strong momentum of growth to attract FDI in China’s port. By the end of2011, the volume of FDI in China’s port had reached over6billion dollars. With the opening-up of China’s port industry and FDI massive influx, port industry market structure is undergoing significant changes. Therefore, the study on the influence of the inflow of FDI to the port industry market structure is very important.This article from the view of the direct investment theory, location theory and industrial organization theory, the first foreign direct investment and market structure to analyze China’s five largest ports group FDI location differentiation characteristics and market structures. From the view of direct investment theory, location theory and industrial organization theory, the paper analyzes regional differentiation characteristics of foreign direct investment and the characteristics of the market structure of Chinese ports. Theil index method is used in this paper to calculate regional differentiation characteristics of foreign direct investment in five port groups. From the view of geographical differentiation, geographic distribution of FDI in Chinese ports is concentrated major in coastal ports, especially in eastern and southern China. About80%to90%of foreign investment is distributed in these two regions. In source of investment, FDI in the Pearl River Delta mainly comes from Asian led by Hong Kong capital and FDI in the Bohai Sea port group mainly comes from European led by AP Moller-Maersk company. In foreign investment patterns, the southeast coastal areas of foreign equilibrium model and inland areas of foreign holding pattern tendency are obvious. The Bohai Rim and the Yangtze River Delta region have foreign equity participation style tendencies, and the Pearl River Delta region has foreign holding style tendencies. About market structure, we can conclude that China’s port market is of oligopolistic and market concentration of port industry showed a declining trend while CR8maintains above0.5, indicating that China’s port market structure remains stable, large ports still have a monopoly position in the market. Further more, the paper used canonical correlation model to research the relationship between FDI and port market structure. Finally, through the study of this relationship of different port groups, we concluded different government port policies to make markets more efficient in the use of foreign capital to make the development of the port market more prosperous and healthy.