| Iron ore is the basic raw materials of iron and steel industry. Since 2003, China has been playing the role of the world's largest buyer. But China has been almost always in a passive situation in the international iron ore price negotiations, which greatly influences on China's national economy. Thus, the solution of China loss of pricing power has become imperative.According to iron ore international and domestic production, trade status and negotiations history, and on the basis of analyzing the international mining giant to use its monopoly position to manipulate iron ore price, the paper uses the Prisoner's Dilemma model of game theory to analyze price-fixing action between iron ore suppliers. Meanwhile iron ore pricing issues are also discussed by building bargaining model between iron ore demand and supplier states (considering the patient level). In conclusion, China's passive position of pricing negotiations in the incomplete information symmetric market environment.Then, from the view point of iron ore demand states, such as Japan and China, on the one hand, in order to solve China's steel enterprise low concentration, and to build the game model of cross-regional mergers of Chinese steel enterprises, the paper puts forward the suggestion that China should implement a combination strategy of steel enterprises integration of the "industrial self-organization" and "government organization and coordination". On the other hand, for the important issue of Chinese largely dependence on imported iron ore, and in order to reduce the reality risk of China's steel industry to bear iron ore prices, the paper proposes that China's steel enterprises should increase the intensity of the strategies of foreign mine equity participation. Through the establishment of the static game model of asymmetric information between China and Japan(both buyers), the paper discussed the reason with balanced approach of risk best for which drives up China equity participation in international iron ore mining. Through comparing with game payment before and after Sino-Japan equity participation, with the principle of maximizing the interests of rational person, the author put forward the shares rate factor of China International mining. Moreover, on the basis of completely analyzing not-aligned short-sighted behavior among Asian countries of iron ore purchasers in the use of the general centipede game model, the paper proposes that China should actively use consultation mechanism (cross-price linkage policy) to establish the buyer's strategic alliance to achieve mutual benefits between China and Japan by way of signal transfer. So China achieves win-win situation with other countries in the international iron ore pricing issues. |
