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IMPORTING AND EXPORTING Essay

I think that this argument is in the best interests of the country as a whole because they would not be worried about jobs and it will keep the overall population’s wages low to increase country’s overall manufacturing exports. Yes, China is a mercantilist Nation because China’s commercial engagement with the rest of the world is largely contributed from mercantile theory. No mercantilism is not a bankrupt theory and it has a place in the modern world because to lower the cost of production and hence cheaper products to increase exports and domestic demand of such domestic goods. Yes China has an economic policy that can be characterized as neo-mercantilist. What should the United States, and other countries, do about this

China’s commercial engagement with the rest of the world is largely scripted from mercantile theory: export boosting policies that are meant to stimulate a balance of payment in China’s favor, ie, manipulating their currency to keep it artificially devalued in support of cheap capital exports and a mechanism of forced high savings, which in effect promotes policies that subsidizes Chinese manufacturers (to lower their cost of production and hence cheaper products to increase exports and domestic demand of such domestic goods) at the expense of their own households and manufacturing jobs in the consumption-crazed US-and-Eurozone – a process that leaves China’s state-coffers endowed in huge surplus reserves. b) What incentive does China have to open its markets to foreign products?

Why might China resist such a move? Incentives: By opening its markets to foreign products, China can exploit its comparative advantage and specialize in the production of goods that it produces most efficiently and to buy good that it produces less efficiently from other countries, even if this means buying goods from other countries that it could produce more efficiently itself. Hence, companies in China can lower their overall cost structure or improve the quality and functionality of their product offering, allowing them to compete more effectively. Besides, globalization is becoming…


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