The Analysis On The Feasibility Of Implementation Of The Strategic Trade Policy In China

For conforming to the trend of the economic globalization, China has to reform our foreign trade system, reduce tariff barrier and non-tariff barrier, widen market openness, research and work out the trade policies which obey WTO rules and protect the interests of the nation. In this case, we should know that trade liberation doesn't means complete free trade, it's impossible for the existence of absolute free trade in real world with great polarization of the rich and poor countries. Foreign trade policy is the derivation of domestic economic policy. Every country makes trade policies which are restricted by the economic development level to protect its own benefits rather than the global benefits. As a developing country, China still has a considerable gap with those developed countries. Following the opening of the domestic market, some industries will be surely impacted by the incoming outsiders. Hence, we have to give a proper protection to trade so as to maintain our economic interests and foster the industrial development.Now our trade protection policies are mostly supported by classical and neo-classical theories. But Within the last few decades, following the new trade theory prevailing, under the premises of scale economies and imperfect competition, the theory of Strategic Trade Policy was born as new trade theory's stretch in the field. It knocks the bottom out of the existing premise of perfect competition, offer the opinion of scale economies and imperfect competition. The new idea has been held forth in international trade area, it is one of the crucial factors for formulating policies. The thesis introduces the theory of Strategic Trade Policy which based on an in-depth study of the trade theory and policy, and then a research topic is raised for analyzing the feasibility and required conditions of implementing the Strategic Trade Policy in China. We can draw the conclusion that the Strategic Trade Policy is feasible in China. But as a developing country experiencing the system restructuring, China is far away from a mature market system. The concealed conditions exist for providing a constraint to the strategic trade policy. For this cause, the countermeasures should be adjusted for gaining the national benefits. The thesis is divided into five parts except the preface and verdict. Part one reviews the traditional trade policies and then makes a brief comment. Part two mostly introduces the theoretical and practical basis of the theory of Strategic Trade Policy, equally explains its meaning and system info. Part three states the implementary conditions of the theory of Strategic Trade Policy which includes the prerequisites and the constraints as well as the concealed conditions in developing countries, especially the countries experiencing system restructuring, moreover it gives an impersonal evaluation. Part four gives a profound analysis of the requisites to the theory of Strategic Trade Policy, and takes the automobile industry for example, at last draw a conclusion that the theory of Strategic Trade Policy is suitable for China. Founded on preceding account, Part five carries out some specific suggestions for its implementation in fields of targeting industries, matching-up with industrial policies, flexibly applying the theory of Strategic Trade Policy in the frame of WTO rules, favorable institutional environment creation and rational arrangement among free trade, foreign capital utilization and national welfare improvement.There are some innovations in the thesis. Firstly, it expatiates on the concept and intention of the theory of Strategic Trade Policy. Secondly, it integrates the theory of Strategic Trade Policy with the practice that China's membership in the WTO. It also investigates how to set up foreign trade policy in the multilateral trade system and extending the utilization of the policy. This is an important problem as well as a goal which my thesis tries to achieve. The third, it spreads the intension and extension of trade policies. In view of the integration of world economy, the useful domestic trade policies such as industrial policies and technology policies are all included within the theory of Strategic Trade Policy. Moreover it explains the theory of Strategic Trade Policy's implementation on the industrial competitiveness and commercial competitiveness enhancement under scale economy and imperfect competition.