Analysis of Applicability of Strategic Trade Policy to China's Electronics and Information Industry: A Perspective from Market Power

International market power is the micro basis for carrying out Strategic Trade Policy (STP). Whether STP should be applied to China's electronics and information industry depends on its market power for different industry subdivision in different international markets. The paper develops the Hall model, analyzes the specific market power of industries of HS85, HS90 and HS8471 in the U.S., Japan and overall international market in quantitative. It shows that market power for China's electronics and information products is strong in the U.S. and in the overall international market, but weak in Japan. And market power for HS8471 is strong in Japan but weak in the U.S. and the overall international market. It should be pointed out that the strong market power for China's some subdivision industry in some international market comes mainly from advantages in cheaper labor and capital investment, seldom from technology advancement. On the basis of empirical and quantitative analysis, the paper draws a conclusion that STP is applicable to some subdivision industries of China's electronics and information industry that have a strong market power in some specific international market.