The Evolution of China's International Trade Policy: Development Through Protection and Liberalization

Abstract

The rapid rise of China is quickly reshaping the world economy. From the perspectives of trade and development, what explains China's remarkable growth? With respect to the nature and impact of its trade and investment policy, China remains a puzzle to many observers and continues to be topic for heated debate. The primary purpose of this paper is to provide an analysis of the evolution of China's foreign trade policy from a trade and development perspective. Examining some of the key developments in China's trade policy and regime, it argues that neither free trade nor protectionsim is the complete answer to development; in China's experience, a "pragmatic" trade policy requires a delicate balance between liberalization and use of industrial policy to support selected economic sectors.

Keywords: China, international trade, foreign trade, trade policy, trade liberalization, trade protection

JEL Classification: F13, L52, O19, K33