Foreign Capital Attraction Under The Influence Of Chinese Market Structure

After the reforming and opening to the world, China made a great progress in foreign capital attraction. At the end of 2002, there were about 5242.86 million dollars (contracted foreign capital) flowing into the second industry, whose share reached 63.32%;the inflow of foreign capital to the tertiary industry was in a rising tendency with the contracted foreign capital reaching 2880.15 million dollars;however, the primary industry was in a drop tendency with the contracted foreign capital only reaching 157.59 million dollars. Therefore, at this time there is a practical significance to make a research on the foreign capital attraction under the influence of market structure.Above all, this paper points out that foreign direct investment is a kind enterprise's behavior, FDI of an enterprise is a result of specific market structure and mutual restriction between competitors under this structure. The relationship between market structure and foreign capital attraction is mutual affection and action. And then this paper regards the constitution factor of market structure, like market concentration ratio, market entry barrier as the impetus to make a research on the China's foreign capital attraction under the influence of market structure from microscopic aspect.We get the conclusion that the increase and decrease of the foreign capital attraction are under the influence of the variation of market concentration ratio through the empirical study on the automobile industry, which is identical with the hypothesis in the paper;also we approve that the barrier effect of policy in foreign capital attraction is weakened and Chinese preferential tax policy promotes that is one of the factors of market entry barrier the flow of foreign capital to some extent through comparative analysis combined with qualitative analysis.Finally, this paper advances the relative suggestion to promote the flow of foreign capital through the further improvement of market structure on the basis of the analysis above combined with the new situation facing to China.The innovation of this paper is from 3 aspects. Firstly is the innovation of content. On the basis of domestic and oversea research, we make a research on the foreign capital attraction under the influence of Chinese market structure, especially is the research on the foreign capital attraction under the influence of preferential policy of taxation, we center on the same aim to avoid dual-taxation and take both the host country and home country into consideration. Secondly is the innovation of courses combination. We combine the industrial organization theory in industrial economywith the traditional international investment theory;discuss the adaptability of western theory in China through empirical study. Thirdly is the innovation of method. We mainly make a research on the foreign capital attraction in China Automobile industry under the influence of market concentration ratio through empirical study. Meanwhile, we discuss the foreign capital attraction under the influence of policy on foreign capital attraction that is one of the market entry barriers through qualitative and quantitative analysis.