Abstract: Attracting foreign investments depend on the strategy of cluster is one of the most important way to develop economy for developing countries. While the multinational corporations squeeze profit out of the local enterprises by buyer power, which would make local enterprises go bankrupt. The basic model of vertical relations in the clusters based on the model of double marginalization was established, set example of IT industrial clusters in Kunshan, and considered the oligopsony power and unequal powers of downstream and upstream marker were important reason of leading vertical squeeze. Decreasing the dependence on multinational corporations and enhancing the non-substituability are important tactic of avoiding excessive competition and vertical squeeze for local enterprises.