Repelling Effect of Vertical Integration under Upstream Monopoly——The Case of CHINALCO

Based on the environment and characteristic of vertical merger in CHINALCO,this paper establishes a two-stage model with an upstream monopoly and a downstream competition,and analyses the repelling effect of vertical integration.The model suggests the forward integration of CHINALCO has obvious repelling effects,but the repelling effect becomes smaller with the reduction of upstream monopoly,and the vertical merger alleviates the diminishing degree.The long-range goal of vertical integration in CHINALCO is to controls the bauxite mining as far as possible,and forms the monopoly advantage on fabrication processes and products using the foreclosure of upstream monopoly one by one.