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Study on Reasons and Countermeasures of the Regional Protectionism

Author: ChenZhe
Tutor: ZhuZeShan
School: Southwestern University
Course: Political Economics
Keywords: Local protectionism Regional interests Revenue-sharing system Performance appraisal system Proposal
CLC: F279.2
Type: Master's thesis
Year: 2010
Downloads: 343
Quote: 1
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Abstract

With the reform of the administrative system, the implementation of the revenue-sharing reform and the moving market process, local protection appear during the economy transformation of China’s market. But by the deepening reform, the local government only pursues to area tax benefits, welfare and opportunities of political promotion which it takes a series of actions to keep economic benefits of the region. Local protectionism not only seriously began to influence the normal development of the market economy but curbed the international competitive level of the industry and even cannot satisfied the requirement of international economy and globalization trend after China was into WTO.Based on the theory of local protectionism and research status of analysis, the paper puts forward the question:why does local protectionism always exist and why cannot be eradicated? Using reverse thinking and qualitative analysis, aided by the simple data is verified, it wants to find out who will own their behavior’s earnings and who will pay the behavior and consequences if produced local protectionism, thus draws the conclusion:1. Local government is implementing the subject and executor of the local-protecting and the purpose of it is to chase interest demand, which is also a kind of interests’game options of central and local conflicts. The influence of the local government to protect the interests of local driven by behavior of own cost and revenue generated measure results of various factors as the main study.2. From market development, marketization, resource allocation, the level of social welfare, technical level, industrial structure adjustment and global economic development trend, and it analysis which unfavorable aspects do local protectionism effect economic development. And then from three parts, the paper discusses reasons of local protectionism:firstly, the local economic interest was caused by local protectionism; secondly, area of the welfare forces local government implements to act local protection;thirdly, the system of organization catalyzes formation of local protectionism. Thus in China, local government make local protectionism mainly because the system of administrative decentralization was not perfect, policy examinational system had defects and the historical reasons caused non-balanced development between different areas. Local protection is the product of China’s current administrative management system, the performance appraisal system of the government officials, current revenue distribution system, legal supervision system in pursuit of revenue and welfare.3. According to the cause of local protectionism, putting forward suggestions of the system reform consider from the political democratization, economic liberalization, system standardization and social sustainable development and so on. It fundamentally eliminates the growth of the local protectionism through establishing national unity market, and to build good market environment to keep free market circulation of resources, and finally achieve the aim of the well-organized development of market economy, just promoting the sustainable development of economic and social.

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