Chicago Training School

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The emergence of free trade contributed to the accelerated economic cooperation between countries. The elimination of fiscal barriers and restrictions stimulated companies to develop their international operations and enter new markets. At the same time, the development of free trade increased the pressure of multinational corporations on local companies to the extent that some industries proved to be vulnerable to the enormous pressure from the part of multinational corporations and foreign companies, which were in an advantageous position compared to local companies.

In such a situation, national governments introduce restrictive measures to protect domestic companies and industries in face of the increased competition from the part of foreign companies. In this respect, it is possible to refer to economic policies conducted by China. China introduced restrictive measures in the automotive parts trade, raising taxes, to protect domestic automotive manufacturers and accelerate the development of automotive industry in China.

On analyzing economic and fiscal policies of China in the automotive industry at large and automotive parts trade in particular, it is important to lay emphasis on the fact that China traditionally conducted protectionist policies. Even after China joined the WTO, the Chinese authorities maintain restrictive policies to protect domestic automotive manufacturers and attract foreign investors to encourage the rise of the automotive industry in the country.

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