Research On The Pricing Mechanism Of Resource Products From The Perspective Of Investment Equity

Since China’s reform and opening up, Chinese economy has increasinglyintegrated into the global economic system. The sustained and rapid economic growthprovides strong power for the world economic growth. Consequently, the demand ofbulk commodities such as energy resources grows remarkably. However, the importand export of Chinese resource products frequently encounter the awkward reality of"cheap sale and expensive buy", which indicates that it is isolated from theMechanism of Resources Products Pricing Internationally (MRPPI). This is a majorchallenge to China’s sustainable economic development and scientific development.From the perspective of international trade, scholars at home and abroad study theinternational pricing mechanism of resources products. The existing researchesconcentrate on various factors affecting the price of resource products, pricing offutures market and trade negotiation, etc. On the whole, it lacks the forming path ofresource products price and the systematic research on evolution. This dissertationintroduces the important research perspective of investment equity. It attempts toresearch on the motivation and general principles of China’s participation inResources Products Pricing Internationally (RPPI) and constructs the theoreticalframework of integrating investment and trade. It has significant theoretical value forthe development of primary products international trade and investment theory.This dissertation is based on the price theory, foreign direct investment argument,market power and game theory, applying the normative analysis, the mathematicalmodel, the empirical model and case study analysis. From the aspecst of investmentequity and trade intermediary, it fully demonstrates the mechanism of the price ofresource products. The research of this dissertation mainly includes the followingaspects:It first introduces the background and the significance of research as well as therelated theory and research progress. It defines the related content and conception ofresource products and investment equity. Second, it emphatically analyses theinternational price forming stages and characteristics of the energy and mineral ofresources products and explores the current situation of China’s participation in MRPPI and the reason of lacking pricing power. It defines the meaning of investmentequity as well as the main ways of resource industry investment, discusses investor,behavior, and the main way of resource industry, and analyzes the increase ofinvestment equity which has a positive effect on China’s participation in resourceproducts pricing mechanism.Furtheremore, this dissertation combs the pricing mechanism of trade intermediary.Based on the evolutionary game model, it concludes that increasing investment equitycan promote the evolution of trade negotiations for the buyer’s stable equilibrium.Depending on the Hotelling model, it analyzes the equity investment which can beachieved profit maximization in the area of the reasonable investment. Finally, itproves that investment equity is an important supplementary mechanism of resourceproducts pricing.On the basis of this theory, applying the econometric model can further explorecontrollable factors such as increasing investment equity that can promote to form acontrollable and involved in price setting mechanism. Take crude oil overseasinvestment in the United States for example, the empirical research finds thatoverseas investment and crude oil import prices have two-way Granger causality inlag phase ii. In addition, the study also finds that there is inverted u-shapedrelationship between investment equity and pricing power.Finally, this dissertation extracts revelation and reference for China by takingJapan’s Mitsui group investment overseas iron ore for example.Based on the existing research, this dissertation mainly expands in the followingfour aspects and proposes the different research perspectives. First, this dissertation isbased on investment equity perspective and again interprets the international pricingmechanism of resource products. It puts forward and constructs the mechanism ofinvestment and trade coordinating determining resource products pricing. Investmentequity is a important useful supplementary to resource products international tradepricing mechanism.Second, introducing investment and other factors as important parameters andfixing evolutionary game model, it concludes that the more stable the evolutionsystem of investment equity increase is, the higher equilibrium probability is.Basically, further using Hotelling model can concludes if equity investment is in a reasonable range, domestic resource intensive upstream enterprise obtains the biggesteconomic rent. Backward integration model which increases investment equity andreverses overly dependent on resource imports is a useful complement of resourceproducts trade pricing.Third, adding the important variable, that is, investment equity, this dissertationuses measurement methods to analyze the mutual influence between resourceproducts investment and price. This dissertation takes crude oil in the United Statesfor an example. By investigating the investment the independent variables of priceand pricing power, it offsets only from the perspective of trade analysis of mainfactors affecting the price of resource products.Finally, it uses case analysis puts forward by mutual promoting investment andtrade, the global layout of upstream and downstream industry, which can gain notonly resource pricing power, also can ensure the industry control, and strengthen thecompetitive power of the country.