On the construction of China's trade protection network

Absrtact: Trade protection is an indispensable part of trade policies of various countries. After China's entry into WTO, China's traditional trade protection system consisting of high tariffs and strict quantitative restrictions gradually collapsed. Based on the theory and practice of international trade, this paper explains the inevitability of building a trade protection network in China, and points out that a perfect and powerful trade protection network framework in line with China's national conditions and WTO rules should be composed of trade policy, industrial policy and extended protection.

Keywords: international trade; Trade protection; Free trade; Trade barriers

1. The inevitability of building a trade protection network in China

Throughout the history of international trade development, trade protection is an organic part of a country's trade policy, which plays an important role in a country's economic development and the cultivation of international competitiveness. Developed countries, especially the United States, have built a perfect trade protection network and played a positive role in the development of their international trade. As the largest developing country, is it necessary for China to build a trade protection network with China characteristics? The answer is yes.

(1) inevitability from the perspective of international trade theory

the development of international trade theory is basically divided into two main lines, namely, trade protection theory and free trade theory. In fact, "although there has been a long-standing dispute between free trade and protected trade in economic theory, the theory of free trade has not moved towards absolute freedom even in concept, and it does not exclude necessary protection" [1].

1. There is consistency between the theory of trade protection and the theory of free trade. Throughout the whole theoretical system of trade protection, all advocate active participation in foreign trade. At this point, the theory of trade protection is consistent with the theory of free trade. For example, mercantilism is the early theory of trade protection theory. Thomas Meng, the most famous representative of it, wrote in the book "Britain's Wealth from Foreign Trade": "Foreign trade is the usual means to increase our wealth and cash." [2] He advocates actively pursuing foreign trade surplus. German Friedrich List put forward in his famous theory of "protecting infant industries" that small and weak industries in his country should be protected. Once such small and weak industries grow to have international competitiveness under the protection of policies, the state should immediately abandon the protection policy and expand the openness of foreign trade, which is conducive to the effective allocation of domestic resources and the enhancement of industrial competitiveness.

in short, all kinds of trade protection theories advocate active participation in foreign trade, which also provides theoretical and logical support for the possibility of promoting the development of domestic foreign trade through appropriate trade protection policies.

2. the reality and guidance of trade protection theory. Through comparative analysis, we believe that the theory of trade protection has revised the unrealistic assumption of the theory of free trade to a certain extent, which is more in line with the current international trade practice, especially providing a theoretical basis for China to implement necessary trade protection.

(1) Liszt's theory of protecting infant industries holds that each country should adopt different foreign trade policies in different historical periods. In the middle and early stage of industrialization, the implementation of trade protection can rapidly develop the national industry, but when the national industry has certain international competitiveness, it must be resolutely abandoned. This is actually a supplement to the implementation conditions of free trade theory. There are many industries in China that are in the emerging or initial stage, so it is necessary and necessary to protect them properly.

(2) Argentine economist Raoul prebisch once put forward the "central periphery theory" from the standpoint of developing countries. This theory divides the world economic system into: the center of industrial countries composed of developed countries and the periphery of primary products composed of underdeveloped countries, and the periphery always develops around the will of the center. Because the benefits of technological progress cannot be distributed equally in all countries, and the market of finished products is monopolized by the central countries, the terms of trade of the peripheral countries have deteriorated. The consequence of protecting industries in peripheral countries is only to correct the elastic difference between income and demand of primary products and industrial products, and will not hinder the progress of international trade; In the process of economic development in peripheral countries, due to the change of import structure, protection measures should also change, but it is still not appropriate to fully liberalize the import of industrial products in central countries. This is not only a revision of the traditional free trade theory, which assumes that all trading countries can benefit from trade equally, but also has important guiding significance for developing countries to implement trade protection.

With China's accession to the WTO, there will be less and less room to improve China's terms of trade by means of tariffs and quotas, and China's terms of trade, especially those of manufactured goods, are indeed in a deteriorating trend. The erosion of economic achievements by changes in terms of trade will probably further expand. Therefore, corresponding trade protection measures should be taken as soon as possible to improve China's terms of trade and maintain the rapid growth of foreign trade.

(3) Keynesianism holds that net exports are part of total demand and can stimulate the development of the national economy, while imports will shrink the national economy. A country's foreign trade surplus or deficit plays an important role in the country's economic ups and downs. Therefore, Keynesianism advocates the state to intervene in international trade, vigorously promote exports, curb imports, and maintain a foreign trade surplus, and links the trade surplus with employment theory, and advocates adopting a series of macroeconomic management and adjustment measures including fiscal policy, monetary and financial policy, income distribution policy and foreign economic policy as the main intervention means to increase effective demand and expand employment. This theory provides a strong theoretical support for China to implement necessary trade protection measures to promote and maintain the foreign trade surplus, and to implement macro-control on the trade sector to increase domestic demand and expand employment [3].

in addition, when a country has an economic crisis, unemployment and economic recession will inevitably lead to the government's protectionist tendency. Keynesian trade theory is a revision of the traditional free trade theory, which assumes that countries are always in a state of trade balance, and also provides theoretical guidance for developing countries to cope with possible economic crises and provide necessary trade protection to ensure the stable development of international trade.

(4) The theory of optimal intervention policy put forward by Gordon, Johnson, etc. holds that developing countries are characterized by a large number of market defects, mainly the distorted wage difference between departments and the buyer's monopoly, and there are also non-economic preferences (that is, developing emerging industries), and all these market defects mean that the state must intervene in the economy. Therefore, the theory of optimal intervention policy holds that when the market distortion is caused by foreign rather than domestic factors, and when the economic target belongs to the foreign sector, it is the best choice to adopt the form of optimal intervention to protect trade. This theory is in line with the actual situation of developing countries, and it is a revision of the assumption that the traditional free trade theory market is perfect. As a developing country, China also has market defects, which requires the state to implement trade protection measures.

(5) Porter put forward in the theory of national competitive advantage that comparative advantage is not necessarily a realistic international competitive advantage, and in order to obtain international competitive advantage, the government can influence industrial competitiveness through subsidies; Support for education can affect the endowment of advanced factors; Provisions on the scale and standards of products will affect the demand and supply of products; Through fiscal and financial policies, the supply, demand and competition of industry and related industries can be affected. This theory revises the comparative advantage theory of the traditional free trade theory, and also provides a theoretical basis for the comprehensive use of political, educational and financial policies for trade protection through appropriate state intervention.

3. Implication of trade protection in the theory of free trade. Even the theory of free trade often expresses or implies some intentions to protect trade. For example, in Ricardo's comparative advantage trade model, it is pointed out that "countries should specialize in producing and exporting products with comparative advantages and importing products without comparative advantages" [2]. As one of the cornerstones of free trade theory, the factor endowment theory also believes that the income distribution effect is that "trade benefits abundant factors and damages scarce factors" [3]. From this, we can think that the owners of scarce factors all have demands for trade protection. It is necessary for most developing countries, represented by China, to implement appropriate trade protection for their scarce factor markets, so as to reduce the impact on the scarce factor markets in trade exchanges with developed countries and achieve the purpose of protecting and supporting domestic economic development.

(II) Inevitability from the perspective of international trade practice

Historically, no country has implemented a pure free trade policy. Protecting trade is an important part of trade policy in any period and every country, and its reason for existence is eternal. There is no unified model of trade protection, and the key lies in how to coordinate the relationship between free trade and trade protection, the cost and benefit of trade protection, domestic interests and foreign interests.

considering the actual needs of China's international trade, it is urgent to build a trade protection network.

first of all, China's market economy system is far from perfect, and there are deficiencies in market awareness, market experience, macroeconomic regulation and control level, and microeconomic activity ability. The unified national market has not really formed, especially the international competitiveness of some important industries is not strong. Therefore, a certain degree of selective trade protection is an important measure to improve the socialist market economic system and cultivate the international competitiveness of China's industries, especially those strategic industries.

Secondly, the trade protection of various countries is a "game" in itself. In the face of the trade protection network of other countries, especially developed countries (including some discriminatory practices against China's import and export trade), if China does not take tit-for-tat trade protection measures, the discriminatory trade infringement of other countries, especially individual developed countries, against China will be unbridled, and China's economic interests will surely suffer heavy losses.

Finally, the current rules of the international trade game protect the interests of developed countries more, and building a trade protection network with China characteristics is a remedy to the current unfair international economic order.

Second, the framework of China's trade protection network

(1) Actively responding to other countries' trade barriers

At present, the most frequently used means of trade protection in the world and the biggest threat to China are anti-dumping measures and setting up technical trade barriers, and China should take appropriate measures accordingly, including:

1. Implementing a strategy of both offensive and defensive against foreign anti-dumping

(. First of all, the government should come forward and try to make other countries recognize China's "market economy status". In a large number of anti-dumping cases against China, the problem of "non-market economy status" is the main reason for the abnormally high failure rate of Chinese enterprises in responding to anti-dumping. Although in the Agreement on China's Accession to the WTO, all members promised that in 2115, after China's accession to the WTO, the current practice of using a third country to substitute prices in anti-dumping investigations on China products will be completely abolished, but in 2115, to fundamentally solve this problem, the government must come forward and make more countries exclude China from the list of non-market economy countries through bilateral negotiations.

Secondly, the revision and utilization of the rules of origin. China's export products are frequently subject to international anti-dumping, and an important and easily overlooked reason is that China's rules of origin are backward. At present, China's rules of origin should be revised and improved in time according to the provisions of WTO agreement on rules of origin, and standardized management should be formed. For those passive quota products with strong production capacity in China, products with comparative advantages and products with relatively excess domestic production capacity, higher origin standards should be formulated to increase the ratio of domestic self-produced parts, so as to reduce the probability of Chinese products being sued by foreign countries for anti-dumping.

Thirdly, in the multilateral negotiations of WTO and regional organizations, we should adopt the strategy of pre-emption and pre-prevention. Establish an early warning mechanism for trade barriers and trade disputes based on modern information means, attach importance to the training of WTO professionals, and arrange Chinese experts and negotiators in the key departments of WTO dispute settlement institutions.

Finally, we should strengthen the guidance of responding to anti-dumping. This includes: establishing and perfecting the anti-dumping response mechanism, cultivating the correlation mechanism between response and benefit, and forming an effective incentive mechanism and restraint mechanism for enterprises to participate in response; Apply WTO anti-dumping rules, bring a lawsuit to the Anti-dumping Measures Committee against unfair allegations, and request a fair and reasonable solution; Use the WTO dispute settlement mechanism to submit anti-dumping disputes to the dispute settlement body for consultation, mediation and arbitration in a timely manner, and use the supervision and implementation mechanism to reserve the right to carry out cross retaliation and ensure that the resolutions of the dispute settlement body can be effectively implemented.

(2) Initiate an appropriate anti-dumping investigation. Up to now, there are few anti-dumping investigations initiated against imported products in China. Before China joined the WTO, there were less than 21 cases, accounting for only 4% of foreign anti-dumping cases encountered by China [4]. China should make full use of anti-dumping tools and initiate anti-dumping investigations abroad, so that anti-dumping has become one of the important means of trade protection in China. This will not only help us to effectively protect our domestic products under WTO rules, but also be a reciprocal deterrent to those countries that abuse anti-dumping against our export products unscrupulously. However, it should be noted that since anti-dumping is a double-edged sword, it should be stopped when it is applied, and it must not be abused.

2. Build a technical trade protection system

(1) Pay attention to the role of WTO/TBT and WTO/SPS notification and consultation centers, and establish a mechanism that can ensure good cooperation and efficient operation among law enforcement agencies in accordance with China's industrial development and WTO agreements. In this regard, we should strengthen the construction of notification and consultation websites, establish foreign technical trade measures information centers and databases, release early warning information in time, and provide information consultation services for enterprises.

(2) Actively promote the certification of a series of international standards such as ISO and IEC, expand the certification coverage of production enterprises, strengthen exchanges and cooperation with international authoritative certification bodies, implement mutual certification, and avoid repeated certification to save funds. At the same time, we should actively participate in the formulation, revision and coordination of international standards, so that international standards can fully reflect China's interests, and strive to incorporate products with China characteristics into international standards, so as to expand China's influence.

(3) make use of the favorable clauses of WTO/TBT agreement and sanitary and phytosanitary agreement (WTO/SPS agreement) to create conditions for China's export. Formulate mandatory standards in safety, hygiene, health, environmental protection and other aspects, formulate and implement relevant laws, regulations, technical standards and inspection systems that are targeted, inhibitory and restrictive to foreign related technical products, build a green barrier in China, and keep products that fail to meet technical standards out of the country.

(II) Perfecting the industrial protection system and implementing active industrial policies in light of China's actual conditions

Industrial protection system and industrial policies are the main components of a country's trade protection system, which directly affect the effectiveness of its trade protection.

1. Improve the domestic industrial protection system

(1) Make full use of the substantive provisions in the rules of the World Trade Organization, which are mainly "exception clauses", and strengthen domestic industrial protection reasonably and legally. There are many "exception clauses" in WTO rules that can be used by China, such as "safeguard clause", "balance of payments exception", "infant industry protection exception", "customs union and free trade area exception" and so on. Some provisions such as security exceptions and special preferential treatment for developing countries can also be used in China, for example, the tariff concessions granted by developing countries to developed countries can be lower than those provided by developed countries, and the governments of developing countries are allowed to provide certain export subsidies.

（2