Abstract: Taking Yiwu as an example, this paper theoretically and practically analyzed the patterns of market power construction through the sales-based cluster. It was revealed that the co-functioning of the market mechanism and the governmental intervention，the adoption of the “meager profit” strategy and the existence of the highly efficient specialized markets were the key factors contributing to the improvement of the operation performance of the enterprises in the cluster. This paper also suggested three ways which would further strengthen the market power. We believe that embedding into a cluster can help the Chinese enterprises to construct and enhance their market power, thus improving their status and correcting the profit distortion in the international division of labor.
Keywords: sales-based cluster; market power; operation performance；Yiwu