External R&D Inputs And The Development Of Strategic Industries

With the development of world trade and the increasingly fierce international competition, strategic trade theory was put forward in the 20th century, the end of the 70s, early 80s. The strategic trade policy has played a significant role in the national strategic industry selection and development. This paper analyzed the background, development and related theory of the strategic trade theory, discussed the applicability of the strategic trade policy instruments under the new international environment. Strategic tariffs, export subsidies and subsidies for R&D are commonly used as the strategic trade tools, which are restricted by the principles of WTO, trade protection and other factors, a country who adopted strategic tariffs or export subsidies, will easily lead to retaliatory tariffs or corresponding subsidies by other countries. In order to avoid trading parties get into"Prisoner's Dilemma", the author advised an alternative policy for the use of strategic trade theory in our country: the external R&D investment.The author set up a game model to analyze the relationship between external R&D investment and the development of China's strategic industries. The study indicated that external R&D investment will not only promote the international competitiveness of enterprises and the growth of strategic industries, but also bring a certain profit to the R&D invest institutions. The recent several years'data demonstrated that the R&D investment played a positive role for the development of automobile industry in our country. The author then analyzed the relationship between venture capital, external R&D investment and the development of strategic industry, discussed the feasibility that the venture capital join into the field of external R&D investment. Finally, the author suggested that we should establish strategic R&D fund to promote the development of strategic industries, and perfect the relevant policies.