China's Auto Industry Strategic Trade Policy Studies

The development of the automobile industry has great strategic meanings to the industry upgrading and economy lift-off of China. During development of automobile industry, the government's appropriate protection and policy guide are essential. In the past, under the influence of immature industry protection theory, China's trade policy mainly aimed to restrain foreign competitors' entry into domestic market through high tariff and various non-tariff trade barriers. However, it is proved that, the excessive protection policy, causing the industry's slow growth and inefficiency, hasn't successfully enhanced the competitive ability of automobile industry.After joining WTO, facing the challenge of world trade liberalization, China has to make adjustments to its domestic trade policy, while the present conditions cannot allow internal policies to lean to the complete free trade. Therefore, how to choose the trade policy of the automobile industry in the future has become an important question that we must deal with seriously.This paper first briefly reviews and appraises the trade policy of the automobile industry in China; Then, based on an analysis of the traditional trade theories, policies and their limitations, it derives new trade theory and strategic trade policy, and analyzes the applicability of the strategic trade policy to the China automobile industry; In the mean time, within the basic framework of WTO, it tries to establish a preliminary model for the international trade policy in automobile industries, validated by real scenarios encountered in the development process of the automobile industries in Japan and Korea, and summarize the lessons learnt. Finally, according to the major issues of the automobile industry in China, it puts forward useful suggestions on industrial policies.