The Political Economy of Trade Policy in China

Most of economists, who prefer either the classical trade theory or the latest emerging new trade theory, adhere to the doctrine of free trade. However, the perplexity between the theoretical ideology and ever-lasting protectionism in reality demonstrates that the political decision-making process of trade policy is often less understood or even ignored. Political economy of trade policy, or simply called endogenous tariff theory, may offer a plausible and decent answer to the dilemma from the perspective of income distribution, rather than economic efficiency.