ABSTRACT
After the second world-war, new changes emerged in the international trade, which
changed the traditional trade theory. Along with the development of new trade theories,
the Strategic Trade Policy appeared in American in l980s the last century. With the
assumptions of scale economies and imperfect competition, the Strategic Trade Policy
uses industrial organization theory to analyze trade problem. The appearance of the
Strategic Trade Policy overthrows the optimality of free trade policy under the
condition of scale economies and imperfect competition, proves the reasonableness of
government intervention. Along with the development of economy globalization and the
aggravation of the world wild competition, the theory and practice of the Strategic
Trade Policy becomes the focus once again.
With the development of economic globalization, China is furthering reform its
foreign trade system, widen the market openness, and some industries will suffer great
impact that come from abroad after the open of our market. As a developing country,
China still has a considerable gap with those developed countries in terms of the
efficiency in market based resource allocation, government behavior and executive
efficiency. Hence we have to give a proper protection to trade so as to maintain our
economic interests and to foster the industrial development. This thesis puts forward
some points of view.
Beginning with origin of Strategy Trade Policy, this article analyzes its
assumptions, f1aws as wel1 as conditions under which it can be employed. Together
with the current situation of China economy, this article goes further to discuss the
theory’s feasibility in China.
UP on the analysis, we come to the conclusion that the feasibility has already been
guaranteed in some industries in china. However, as a developing country which is
undergoing the economic system transformation, China still has a long way to go in
terms of the application of Strategy Trade Policy. To provide practical suggestion for
the successful application of our strategic trade policy is another important significance
of this paper.
Key words: Strategic Trade Policy, Imperfect information, Industrial
Structures