Strategic Trade Policy Theory

Strategic Trade Policy theory is based on imperfect competition and Economies of Scale. When governments enact policy to extend domestic company's export, occupy more markets and enhance international competitive power, they consider domestic companies' status on the domestic and overseas markets, and think over the responses of foreign government and company.Since the reform and opening, whether from the total amount or quality, the economy of our country has enormous promotion. However, there is still sizable disparity in the economic development between our country and the developed countries. After entering WTO, with the opening of the market, some industries will suffer from intense impact of foreign companies. Therefore, our country should continue strengthening the protection of the weak industries while opening actively. Combining the Strategic Trade Policy theory with the traditional Infant Industry Protection theory, which will be the theoretical foundation of establishment the policy of foreign trade of our country. It contributes accelerating the upgrading of the industrial structure and promoting new industry ripping rapidly.This thesis is divided into three chapters besides the introduction. Firstly, it reviews the background and content of Strategic Trade Policy theory; Secondly, through drawing lessons from the strategic trade policies of Japan and U.S.A., studying the case of agricultural international competitive power of European Union and fast emergence in automobile industry in South Korea, This thesis considers the present industry development of China; Finally, it analyzes the market of auto-industry of China, examines the applicability for our country car-industry's development of the strategic trade policy, and gives some suggestions for how to support the development of the Chinese auto-industry.