Multinational Grain Merchants’ Control Strategies And China’s Grain Industry Countermeasures

China is a big food producer and a large consumption country, the1.3billion people’food problem determines the fact that China’s food problems can be only solved by itself. With economic globalization and China’s reform and opening up, China has made great economic achievements, meanwhile an unprecedent food security issues has appeared in front of us, in which foreign investment in China’s grain industry has played a very complicated role. the healthy and stable development of China’s grain industry, has a great relationship with the whole performance of our country’s macroeconomy and our country’s social stability as well as people’s vital interests. Therefore, the study of the role foreign investment played in China’s food industry, the currentt status and development of the various forces Chinese food industry faces has a very prominent practical significance.This article will focus on multinational grain merchants’control strategies and the countermeasures of our country’s grain industry. Firstly, this article analyze multinational grain merchants’current development status in China and their competing relationship with local food businesses. Secondly, through econometric analysis, including the unit root test, cointegration test and the coefficient estimates, the final empirical results show that:to some extent,the control of multinational grain merchants in China’s grain industry does exist.On this basis, the paper further analyze the control strategies of the multinational grain merchants on China’s grain industry and the strategies’ mechanism from the horizontal and vertical dimensions respectively Transverse dimension control strategies including cross-border mergers, acquisitions and strategic alliances; longitudinal dimension of the control strategy is mainly refers to the whole industry chain control strategies upstream integration strategies,downstream integration strategies and contract-based longitudinal control strategy. This article deeply analyze them in detail. Multinational grain merchants’transverse cross-border mergers and acquisitions mainly refers to the multinational grain merchants’mergers and acquisitions in the same food industry or the related industries strategic alliances refers to that two or more coalition partners cooperated with commitment and trust to achieve resource sharing, complementary advantages and other strategic objectives. From the vertical dimension of view, multinational grain merchants achieve food industry upstream integrated operation and control through the production control or monopolizing resources, technology patent protection, strong cooperation, global monitoring,and political lobbying; what’s more they further capture industry vertical integration through seizing the high ground of the processed circulation preoccupying the residual value, sales promotion and other grain industry downstream control policy enforcement, thus forming the absolute control capabilities of the end food product and market forces. In addition, contract-based food industry vertical integration in the multinational grain merchants is undertaken under the auspices of two or more continuous production process, or production and sales stage combined to a common ownership of monopolistic grain merchants. In this process, the multinational food companies expand contracts between enterprises to contract within a single grain enterprises through mergers, joint reorganization or acquisition etc,thus controling the end-consumer products and services,what’s more they take before backward integration contract in the food chain to establish the whole industry chain competitive advantage. Therefore, in accordance with the business inputs, outputs industrial chain direction, contract-based multinational grain merchants control can be divided into backward integration which expands upwardly and upward integration which expands backwardly. Either from the horizontal or vertical dimension,all of the multinational grain merchants’strategies aim at gaining some control over our food industry,and achieving some dominanceBased on the above analysis and some domestic and foreign policies and food industry experience, we finally put forward relevant policies amd recommendations mainly from the government and enterprise parts which mainly concerns market competitiveness, brand, legal, and the chain,and this article also conducted in-depth analysis of this measures.