Whose Interests Should Be the Paramount Concern Essay Example

Whose Interests Should Be the Paramount Concern Paper Generally speaking, the free trade policy is better to the consumers, but this will bring big challenge to the native reducers. However, if the government implements protective trade policy to prohibit the foreign goods from coming Into the native country, this will short down the supply of foreign goods and the consumers choices. This kind of policy makes the consumers have to spend more money on the import goods. Every coin has two sides, so is the foreign trade policy. The enterprises and the consumers benefits are controversial, so the government should balance them, when the government sets up the foreign trade policy. 1 . The Introduction of the problem The foreign trade policy ant protect the producers and the consumers benefits at the same time, so when we set up the foreign trade policy, we should obey this principle: Maximize ones benefit at the condition that the other ones lest loss, in order to get overall benefit. To an enterprise with low level of productive, It may hope to stand stable In the native market: however, to an enterprise with high level of productive, it may hope to get a large space in the international market. Therefore, the producers produce capability determines the producers benefit wanting. The consumers income determines their benefit wanting. Too poor man, it must make sure that he can live a normal life firstly, at this moment, his benefit wanting Is that he can buy his necessities at the lowest price; to a rich man, his economy level determines he can have more wanting. We will write a custom essay sample on Whose Interests Should Be the Paramount Concern specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Whose Interests Should Be the Paramount Concern specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Whose Interests Should Be the Paramount Concern specifically for you FOR ONLY $16.38 $13.9/page Hire Writer He may care about the price of articles of luxury, rather than that of food. So the rich ones benefit wanting is quite different from the poor ones. The producers capability of productive and the consumers Income are relative to the a countrys development of economy, so we can get a producers and consumers FIFO Dental wanting determinants canal. Producers Capability Economic Development Level of Productive Producers Benefit Demand Consumers Benefit Consumers Income Demand Figure 1 . Producers and Consumers Benefit Demand Chain When the government sets up the foreign trade policy, it firstly should make out the countrys level of economy and the producers level of economy and the consumers consumption wanting in order to find out their own benefit wanting. The government then should compare the different interest groups benefit wanting and sets up the 62 September, 2008 appropriate foreign trade policy under the principle: Maximize one groups benefit on the condition that the other one has the fewest losses, in order to get the overall benefit. The analysis of how to set up the foreign trade policy 2. 1 Dividing the economic developmental stage Walt Whitman Roster was used to point out that the development of economy should be divided into six stages: Traditional society stage, Preconditions for take-off stage, Take-off stage, Drive to maturity stage, Age of High mass consumption and pursue quality stage. However, Cheney, another American economist, advised to divide the economy into three phases: Initial stage of economy, Industrialization stage and Developed economy stage. The Chinese economist, Lie You divided the development of economy into five phases: Generation stage, the stage of development, growth stage, strong stage and mature stage. As Lie Hypertension was based on the Rows and Cheneys viewpoint, so this article will take the Lie Hues theory to divide the development of economy. 2. 2 Policy Suggestions at each stage 2. 2. 1 T he first stageGeneration Stage The agricultural sector is the main sector in the society. The producers are all small farmers in the unit of family. So at this stage, the producers are also consumers, and they need lots of food. However, due to the low productivity, there will be more need than supply. On the other hand, due to the constriction of nature condition, the native agricultural goods are very rare. So the government should take up the free trade policy in order to import some other agricultural goods. 2. 2. 2 The second stageThe Stage of Development In this period, although the agricultural sector is still the main productive sector, the proportion of the agricultural sector in the GAP begins to crease; some of the rural labor force are transferring to the city. During this period, the industrial sector will take the place of the agricultural sector, becoming the first sector. As the industry in the native country is in the early stage, its really very Doolittle Tort teen to compete Witt ten Torrent companies, so ten government NAS to take up protective trade policy to the industrial sector. In this period, as peoples salary is still at a low level, consumers still spend lots of money on the daily necessities, only a few consumers are in need of some kinds of industrial products. Therefore, the protective trade policy will not hurt the consumers benefit. The level of mechanization in agricultural production is still very low, and the productivity and efficiency are also very low. The agricultural producer needs to be protected to resist the competition from the foreigners. Compared with industrial sector, the government should give some protection to the agricultural sector in the form of subsidiary etc. 2. 2. 3 The third stageGrowth Stage In this period, the economy in the country has have made rapid progress and the ratio of revenue to GAP declines hardly, even less than that of service industry. However, with the development of industry, the level of mechanization in agricultural production has been improved obviously. The agricultural production can not only make the native peoples needs, but also have surplus. So the government can implement free trade policy to the agriculture and help it export aboard. The enterprise in industry sector also gets an obvious progress and the ratio of industry sector to GAP has been further improved. Some enterprises become mature in the market, they are not in a totally passive situation when they compete with the foreign ones. However, they are eager to get lots of advanced technology for both production and management from the foreign countries. On the other hand, peoples living standard and their quality of life are improved; consumers begin to have diversified demand on industrial products. However, in this period, the native enterprises may cant make consumers high needs. So compared with the second stage, the trade policy can relieve some constraints on industrial products; and welcome the foreign enterprises to invest. Service industry and tertiary industry have made great progress, but compared with he ones in developed countries, they still I lack competitiveness. However, at this time, the need of industrial products is still much more than that of service, so the government can implement protective trade policy on tertiary industry. This policy will not bring lots of losses to the consumers and will protect the native enterprises. 2. 2. 4 The fourth StageStrong Stage Actually, lots of medium-level developed countries are at this stage nowadays. Each industry in native country become mature, but still doesnt have absolute advantage in the world. The industrial enterprises are Seibel to 63 Volvo. 3, NO. 9 withstand the competition of the foreign enterprises and their biggest difficulty is how to get a larger market space in the international market. Tertiary industry also makes a progress, most of the businesses are getting mature and some of them have the ability to compete with the foreign competitors. During this period, the consumers have a higher level of income; they have more need in the service industry. So the government can take up free trade policy in the industrial sector, Ana try to Nell ten native companies to go aurora. I en government can Turner increases liberalizing of services, in order to meet the consumers multifarious needs in the service industry. 2. 2. 5 The fifth stage Mature Stage During this period, the service industry has become the economic backbone of the country. Enterprises begin to take the world as their objective market. The consumers dont care about the prices of goods, as they have a high level of income. Therefore, the government should advocate the free trade policy. We have analyzed the consumers and producers main feature in the former content and given lots of suggestion on the trade policy in each stage. However, we still believe that there isnt a common trade policy theory to all the countries. The foreign trade policy should be changed according to the real situation of the country. Generally speaking, at the beginning of the development of economy and at the developed stage, the government can take up free trade policy. However, during the process of the economy, the government should try to use protective trade policy on each industry. 3. Suggestion on foreign trade policy in China Nowadays, each industry is developing very fast. Specially speaking, compared with the developed countries, the production level in agricultural sector still lags behind, so china can not implement free trade policy on agriculture, on the contrary, we should make great efforts to it to improve the international competitiveness of agricultural products.