The Chinese Economy - Research Paper Example

Even the foreign trade policies in relation to the export and import activities have been widely reformed by the Chinese government in terms of liberalizing the import licenses and enhancing the level of subsidies in regards to exports. Despite a large amount of liberalization promoted in the sector of foreign trade it is found that the value of taxes related to import activities countered rise which in turn disrupted such functions. However, the ascension of China to the World Trade Organization happened to render a large number of changes to the government policies of the country in relation to international trade.

It is observed that the post-ascension of China to the World Trade Organization initiated the growth of tariff rates in the field of agricultural commodities. The level of production and the range of import activities in regards to agricultural commodities were controlled through the rendering of tariff rates on the produces by the Chinese government (Gale). Again the ascension of China to World Trade Organization has also largely impacted the trade policies of China concerning the domestic trade activities.

The observation made in this respect shows that the government of China felt bound to alter the subsidiary policies through not granting subsidies to companies which mainly resorted to indigenous materials for production purposes. The above fact earns evidence with the change in Chinese government policies to reduce the level of subsidies and even putting an end to such for power companies in China depending on wind power. The government of China through the reduction of subsidies hinted on the requirement of growth of import activities in such sector and thereby explicitly desired the reduction of dependence on indigenous materials.

This activity is found to be impacted through the enhancement of American interference where the government of America strongly desired the reduction of the Chinese potential. American interference to alter the realm of government policies pertaining to Chinese domestic trade can be understood from the potential threat which the American government faces from the growth of Chinese power.