Study On Iron Ore Import Dependency Of China And Stimulation And Restriction Mechanism From Industrial Security Perspective

The development of steel industry of China promotes the growth of demand of iron ore, which has resulted in market demand and supply gap. This gap relies on foreign import to fill. Through studying the degree of dependence on import of iron ore and the security situation of China’s iron ore industry, it helps to further propose suggestions in order to safeguard China industrial security of iron ore and steel.First, this paper defines the formulas and calculation steps of self-sufficiency rate, import market concentration and import dependent coefficient, which analyses the degree of China’s iron ore import dependence;In the basis of referencing the foreign and domestic research in evaluating industial security, combining with the state of China’s iron ore import trade, this paper builds evaluation system of China’s iron ore industrial security from industial competitiveness, industial living environment, industial dependence on foreign trade and industial control. This evaluation system includes 15 sub-indexes, through identifing the safety warning scope of each indicator and building industial security evaluation model of China’s iron ore to eatimate industrial safety score;Applying econometric model to verify the changes relationship between import dependent coefficient and industial safety score.Secondly, according to the formula and calculation steps,obtaining that iron ore self-sufficiency rate is from 76.2 percent in 2000 drop to 63.92 percent in 2013, which reflects that domestic production increases while imports also increase, the rate of increase in imports is greater than the rate of increase in domestic production;HHI index is from 0.34797 in 2000 drop to 0.36832 in 2013, which reflects that sources of imports of iron ore are more concentrated;The import dependent coefficients of Australia, Brazil, India, South Africa and total respectively are from 0.7802 drop to 0.377, from 0.774 drop to 0.108, from 0.0147 drop to 0.000268, from 0.01285 drop to 0.00428, from 3.987 drop to 1.049. From those data to see, the situation is optimistic. Hwever, it still exist.it still adversely affect China’s industial safety;Applying principal component analysis to determine indicators’weights, according to the safety warning scope and the industial security evaluation model, this article calculates that the industial safety score are respectively 55.76,58.52,60.84,61.11,61.38,60.39,58.84,59.3,60.15,62.11,57.7,57.94 ,62.23 from 2000 to 2012, all these years are in unsafe condition,which reflects that the import dependence has bring out unsafe iron ore industry; Using above two sets of data to make stationary test and VAR model estimation. All these analysis proof that higher dependence on iron ore, more negative for iron ore industry safety.Last, facing the issue of China’s dependence on iron ore leading to indusrial unsafety, Chinese government and Industry Association respectively adopt incentive and restraint mechanisms including investment incentives, cutting tax incentives, financial supporting incentives and import qualified.constraints, financing constraints, resource depletion and environmental destruction constraints. According to the principal-agent theory to construct incentive and restraint mechanisms theoretical model between Chinese government and iron ore producers.This model lists the economic net income of iron ore producers to analyze that the government incentive behaviors are how to affect the level of effort for iron ore producers to increase production. In order to organize and implement the Import Buyer Alliance, by game analysis between industry associations and steel companies to construct expected benefit function to show the conditions of smoothly implementing the Buyer Union. By learning from Japan’s iron ore resources strategy mode, get below implications:to eliminate backward production capacity to form a community of interests negotiations, to increase investment in overseas iron ore resources, to diversify mining project development and to establish strategic reserves of iron ore resources.