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A political economic analysis based on the perspective of empirical China trade protection policy

Author: CaiZuoZuo
Tutor: ZhangZuoMing
School: Fudan University
Course: Political Economics
Keywords: Trade Policy Political Economics Interest Group
CLC: F752.02
Type: Master's thesis
Year: 2012
Downloads: 198
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In China’s trade activities, its export has always been hindered by foreign protective measures, while China also has taken certain protective actions on its import. Trade protection is a prevailing phenomenon in international trade. Although most countries are harmed by it, they are still in support of trade protection. This dissertation is to explain the process of China’s trade policy making, and analyze the determinants of trade policy.The dissertation is divided into five chapters. The first is the introduction. The second chapter analyzes the long-standing dispute between the free trade theory and protective trade theory, and then discusses the main points of protective trade from the perspective of traditional economics and political economics respectively, and thus explains the importance and pioneering contribution of the political economy of trade policy. The third chapter applies the theory, concepts and framework of political economics to the case of China. Based on the characteristics of China’s political system, it analyzes the institutional constraints and process of trade policy making from three aspects:national interests and objectives, domestic interest groups, and international trade system and foreign governments (bilateral trade relations).On one hand, focusing on the domestic factors, the chapter explores the influence of domestic political environment, underlying objectives of the government, and domestic interest groups; On the other hand, the chapter also discusses the multilateral trade system and the bilateral trade relations. It describes the relation between the international trade environment and China’s trade policy decision within the framework of WTO. Based on the above analysis of various interest groups and institutional environment, the fourth chapter establishes the political economic model of trade policy according to the situation of China. The model is established based on the social welfare function concerning the Chinese government. It is quite different from the situation of western country, where the government usually can be greatly influenced by the lobbying activities of domestic interest groups. The model reflects the government’s strategic concern on income distribution and industry development. The result of regression shows that China’s tariff is influenced by both the "national interest model" and the "interest group model", and it is an endogenous variable jointly determined by various political and economic factors. The Chinese government has been biased towards certain interest groups and made preferential trade policy to support certain productive sectors. This also shows that the flexibility of China’s trade policy decision is limited, restricted by employment, industrial structure, and so on. In the last, based on the empirical results, the fifth chapter argues that the key issue to be addressed in China’s trade policy decision is to find a scientific and rational way of interests expression and compensation, to establish the means and channels to realize the equal communication of interests between the government, producers and consumers, so as to achieve the maximization of social interests, and put forward policy suggestions.

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CLC: > Economic > Trade and Economic > States foreign trade > China's foreign trade > Principle of policy and its elaborate > Trade protection
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