Chinese Innovation Mercantilism - Research Paper Example

The protection was also achievable through the creation of stability of exports over imports, consequently leading to the accumulation of bullion. In the present world, countries pursue industrial policies as part of the gradually emerging theory of strategic trade. In this case, the intention is to stimulate the nation’s economic growth, which is a form of neo-mercantilism. In the current society, neo-mercantilism is based on the thought that international markets regulate economies.

China is an example of a country pursuing mercantilist policies. The economic policy in China is about achieving autarky. The mercantilist policies in China defend their companies through unfairly spurring exports and reducing imports. Such policies do not only protect the Chinese firms, but also the foreign firms operating in China. These policies are inclusive of currency manipulation, relatively high tariffs, and tax incentives for exports. Conversely, China controls foreign purchases in a manner that somewhat forces technological transfer to the state.

These policies deny foreign establishments critical inputs, which is a form of mercantilism. Other countries pursuing mercantilist policies through innovation are inclusive Malaysia India, Indonesia, Turkey, and the Philippines among others. Most of the aforementioned countries impose high tariffs on some of their ICT goods. Through innovation mercantilism, these countries force foreign entities to accept domestic sourcing necessary for production requirements or technology transfers. They impose these practices as a condition for the entities to gain market access. Read More