China Join In WTO And Economic Analysis Of Subsidy

After China join in WTO, Chinese economy will have better future. But in the meanwhile, China's government will also face a rigorous test of a new problem, that is, how to exercise rights and perform duties in the most efficient and legal way. In recent years, trade friction increases in accordance with China's developing rapidly. Being a formal member of WTO cannot reduce trade friction, on the contrary, it will bring more severe outside competing environment in some fields. In this paper, we lucubrate economic mechanism of subsidy that is one of the most subtle problems in international trade. On this ground, we research how to build China's industry fiscal subsidy system, by applying WTO subsidy rules. This research is useful for China to use subsidy scientifically.This paper is mainly directed to the study of subsidy and its related analysis of economical affects in some areas. In accordance with the economical affects by subsidy policies, this paper gradually expands the main topic in different angle of views, from microeconomic to macroeconomic, from abstract to concrete and from theoretical to policy study separately.This thesis consists of four parts.Part one is introduction. It mainly sum up existing research results and set up this paper's frame work.Part two elaborates the economic mechanism of subsidy acting on national resource distribution that is the microeconomic result of subsidy. In this part, we mainly discusses the short-term and long-term economic influence of subsidy in production and the efficiency of subsidy that act on enterprises.Part three, the economic mechanism of subsidy acting on international resource distribution. This part mainly discusses the macroeconomic result of subsidy. As to effect of strategic subsidy policy, economists have different opinions. In this part, we will describe these opinions in according to positive , negative and double negative and stress on the economic effect of export subsidy and R&D subsidy, then we put forward some necessary conditions that a nation can carry out strategic subsidy policysuccessfully.Part four is policy research, we will discuss how to carry out subsidy policy and which subsidy policy we can use in according to rules of WTO. So, it is necessary to know content of the SCM convention, the promise when China join in WTO and the actuality about China's existing subsidy. Then we will present Chinese strategy adopted in financial subsidy policy to satisfy WTO requirements.