The Study Of Strategic Trade Policy

The theory of strategic trade policy was produced and developed in the United States during the 80's of last century. Actually it claims that the government of a country, facing international competition and under the condition of incomplete competition and scale economy or in the circumstance of marker failure existing in the exterior economy, can interfere relevant industries by adopting measures such as trade and industry policy for the sake of its own country's benefits.This article deals with the two major components of strategic trade policy, so-called as profit transfer theory and profit create theory or the exterior theory, on the basis of which it explores the necessity and applicability of the discussed theory to our own country. In proceeding the treatise, a variety of methods have been used, for example, the economy model, game theory, mathematic and graphic tools, as well as the philosophy principle of concrete analysis in concrete problems and of contacting theory with the actual.The treatise is divided into five chapters besides a brief introduction. The first two chapters analyze the classic theory of strategic trade policy, the profit transfer theory, which is illustrated on the basis of the two different marker structures, those are two countries are competing incompletely with each other in the third party's market and in the other party's market, form the perspective of partial and general equilibrium, the function mechanism and welfare affection, theoretical rationality and the actual feasibility, as well as the scale economy denoted by marginal cost and fixed cost respectively. In the third chapter, a positive analysis,concerning the effectiveness of strategic trade policy, is provided by making use of the theoretical conclusions above and taking the competition between America and Japan in steel industry as an example. The fourth chapter proceeds the discussion at the subject of the exterior economy, which is another reason for assertion the strategic trade policy. In this chapter the function of government in supporting high-tech industries is discussed by combining the theoretical analysis with the practice in America and Japan, and by using the philosophy method of coordinating history with logic. In addition, it provides relevant analysis about exterior sale economy. The last chapter, as far as our country is concerned, proceeds the treatise from such aspects as the necessity, the purpose and the means of putting the strategic trade policy into practice, among which to choose an appropriate industry is essential.