(a) the content of the theory of infant industry protection
The theory of infant industry protection is put forward by the American economist A. Hamilton, a kind of transitional protection of some specific industries, the theory of fostering measures, is the basic theory of protectionism in international trade. Its basic content is: a country's a new industry, when it is still in the most moderate size of the start-up period, may not be able to withstand foreign competition. If, by adopting an appropriate protection policy for the industry, it can improve its competitiveness, have a comparative advantage in the future, and be able to export and contribute to the development of the national economy, it should adopt a transitional protection and fostering policy. The main use of tariff protection and other means to realize.
(B) the definition of infant industry
To recognize the theory of infant industry protection, must have a clear definition of infant industry. Here refers to the infant industry must have the following three characteristics:
First, the industry is the country has not yet developed mature new industries. It is not yet capable of competing with similar industries that are more developed abroad. And the industry has the potential for development.
Second, the industry has a large degree of industrial relevance. That is, the industry and the domestic development of many related industries are closely related to the development of these industries have positive externalities. This feature provides the necessity for the protection of infant industry.
Thirdly, the industry lacks the financial strength to promote its development at this stage.
It is also necessary to specify here that the protection of infant industry refers to a series of policies to make it free from the fierce competition of similar industries abroad, and at the same time, provide various favorable conditions for its development and create a good international and domestic environment for it.
II. China's infant industry protection status quo
According to the definition of the theory of infant industry, in China, infant industry is generally manifested as capital, technology-intensive industries, such as automobiles, computers, communications equipment and so on. Because of the lack of capital and technology, as well as the past poor external environment and other reasons at the beginning of the reform and opening up, China's overall economic environment is poor, the lack of materials, domestic production enterprises on the one hand, can not meet the normal demand for materials, but also because of the lack of supply and the phenomenon of smuggling is serious, the impact on the domestic production enterprises is serious. Therefore, in the process of reform and opening up, the government has adopted a policy of supporting domestic infant production enterprises.
By 2008, the reform and opening-up process has been carried out for 30 years, China has made remarkable achievements. Entering the new century, China has become a major exporting country, manufacturing country, "the world factory". China's domestic infant industry has also gradually formed its own competitiveness and taken its place in the world economy.
In 1978, China did not have the ability to produce computers domestically and had to rely on imports. By the end of the 1980s, China's human resources began to attract foreign computer manufacturers to set up factories in China, while local manufacturers also began to appear, and began to form the scale of the industry. Into the 21st century, after 20 years of development, the domestic computer production industry has accounted for nearly half of the world's share. 2008, China's above-scale computer industry realized sales revenue of 171.34 billion yuan, an increase of 7.3% year-on-year, the scale of the world continues to remain at the forefront of the computer production accounted for the proportion of the world's share of more than 40%, and has become a manufacturing power. At the same time in 2008 the industry **** export desktop computers 7.682 million units, is also an important export power.
Also for the domestic communications and automobile manufacturing industries that are childish industries, after 30 years of development, also made great achievements.
Before 1978, the development of China's communications industry belonged to the exploratory stage, and the development of the industry was in its infancy. The postal service was the main means of transmitting information, while the penetration rate of telephone was low and the telecommunication industry developed slowly. at the end of the 20th century, China's telecommunication industry developed rapidly, with the penetration rate of telephone in cities and towns reaching more than 90%, and new technological products, such as cell phones, began to enter the ordinary household users. Entering the 21st century, China's telecommunications business entered a period of rapid expansion. Today, China's telecommunications network and the scale of users ranked first in the world, the scale of the electronic information industry ranked first in the world, and has become a basic industry of the national economy, the pillar industry and the pilot industry.
China's automobile industry, as a typical representative of domestic infant industry, is representative of the development process during the 30 years of reform and opening up. Since the reform and opening up, the automobile industry has realized leapfrog development. from 1980 to 1990, the automobile output increased 1.3 times; from 1990 to 2000, the automobile output increased 3 times. It is expected that from 2000 to 2010, the automobile output will increase by more than 4 times, and in 2010, the total automobile output in China will be more than 10 million units. The development of the automobile industry in the last two decades has been accelerated significantly. 2002 after China's formal accession to the WTO, China's automobile industry is not only not subject to the serious impact of imported cars, but also an explosive growth.
Through the above analysis of the automobile, computer, communication equipment and other industries, it can be found that; over the past three decades, the domestic infant industry has made great progress and formed a strong competitiveness. For some manufacturing industries, such as the electronics manufacturing industry is even in the forefront of the world, and become the main supplier of products to the world market. The reason why these childish industries can make remarkable achievements, and the government adopted the support policy is inseparable, so for the reform and opening up during the analysis of support policy, has significant practical significance.
III. For the reform and opening up during the analysis of infant industry protection measures
Based on the government's implementation of infant industry protection measures, can be roughly divided into three stages of the reform and opening up process: first of all, the opening up of 1978 to 1992, China's large-scale reduction of tariffs for the first stage; the second stage can be from 1992 to December 2001, China's accession to the World Trade Organization, and finally, the third stage refers to the December 11, 2001, China's accession to the World Trade Organization. The third stage refers to China's accession to the World Trade Organization on December 11, 2001 to the present day. In the thirty years of reform and opening up, China's economy has undergone radical changes, and its economic strength has become the third largest economic power in the world, with its comprehensive national power rising. Therefore, the analysis of the "China Model" is not only a summary of the experience of 30 years of reform and opening up, but also an important practical significance and reference for the economic development of other developing countries.
(I) The analysis of the first stage of the protection measures of the infant industry
In the first stage of the period, China did not need to bear the obligation to reduce tariffs because it did not join the GATT. And tariffs have the effect of direct protection, and therefore become the government's first choice. That is, through high tariffs to prevent foreign industrial products from entering the domestic market, and then reduce the impact on domestic enterprises, so as to play a protective role.
Before 1992, China's domestic communications, automobile, electronics manufacturing and other industries are in the initial stage, the strength of the weak, unable to compete with foreign countries, the government was forced to implement the policy of protection and support. Tariffs have a significant hindering effect, and thus become the main means. China's tariff level has remained high, high tariffs raise the price of imported goods in China's market, limiting the number of imported goods, so that China's domestic enterprise products, especially the domestic infant industry for better protection, and inhibit the domestic tendency to high consumption and inflation and other tendencies.
But because tariffs have a strong impediment to trade, they also have a large negative impact. First of all, high tariffs provide an umbrella for the domestic industry, so that it loses the impetus to move forward, and loses the willingness to carry out technological innovation and industrial upgrading, which is contrary to the original intention of the protection; on the other hand, because the tariff rate is too high not only is not conducive to China's integration with the world, but also to a certain extent will encourage smuggling, which is not conducive to the implementation of the customs tariff system in China as well as the stability of the society.
(2) The second phase of the analysis of infant industry protection measures
The second phase of the period, China's infant industry support policy is still characterized by tariffs, but the new means of support subsidies and quota system began to play a greater role.
Compared with protective tariffs, import quotas have unique advantages, which appear more concise and effective. When the domestic demand for a commodity surge, the price is rapidly rising, the protective effect of protective tariffs will be correspondingly weakened, but at this time the import quota will have a better role. Thus, when China protects the automobile, textile, agriculture and resource industries, the issuance of import quotas is treated as an auxiliary means of tariff protection. China's import quota policy since the reform and opening up began to implement, for the development of infant industry plays an important role.
In the early nineties, domestic automobile, textile, agriculture and resource industries were in urgent need of policy protection because of their weak competitiveness. But at the same time, because of the sensitivity of the tariff rate, arbitrarily raise the level of tariffs is easy to incur the trade retaliation of other countries, and thus the quota system in the development of China's infant industries played a fairly important role. In the protection of domestic infant industry at the same time, especially to meet the market after the opening of the fierce international competition to win valuable time, so that it can take this to grow their own strength, improve the overall level of technology and management level; Moreover, because of the quota restrictions, foreign goods into the domestic market and directly in the domestic factory or joint factory compared to the lower cost of production attracted large multinational corporations have to China to invest in China, objectively For the domestic industrial technology to keep up with the new generation, to attract capital to provide a convenient.
China's subsidy policy is based on the World Trade Organization subsidy rules to designate, to China's agricultural subsidies, for example. 1995 entry into force of the WTO "Agreement on Agriculture", is China's agricultural subsidies legislation is the fundamental basis for the WTO is also to regulate agricultural subsidies related to the WTO legal guidelines. According to the provisions of the WTO Agreement on Agriculture, agricultural subsidies under the framework of WTO rules, mainly including domestic support and export subsidies in two parts.
(C) The third stage of the analysis of infant industry protection measures
China's accession to the World Trade Organization at the same time, but also marks the beginning of China's transition to free trade, tariffs, subsidies, quotas and other policies are required to be abolished within a specified period of time. China's main task at this stage is to smooth the transition of the infant industry from the period of protection policy to the period of free trade policy, to avoid major economic fluctuations. To enable the free flow of resources and the implementation of free trade.
The protection measures at this stage are to provide a temporary buffer for the domestic industry to avoid a hard landing of the economy, so whether it is tariffs, quotas, or subsidies, one of the important features of the current stage is to reduce year by year, the protection effect gradually weakened until it disappears. In terms of tariffs, China has reduced the arithmetic average level of tariffs from 43.2% in 1992 to 10.4% in 2005 through the negotiation commitment of its accession to the World Trade Organization (WTO). As for quotas, China eliminated all import quotas in 2005. Until now, China has basically canceled all the protection policies and opened up all the markets that it promised to open up, and the domestic industry has not suffered too obvious impact, still take the automobile industry as an example.
Reports from the automotive industry show that the imported car market in the first quarter of 2005 did not bring a significant impact on China's auto industry. And in 2006 from the China Association of Automobile Manufacturers statistics also show that there is no expected "miserable", on the contrary, in January this year, China's local car market share has reached 28.7%, for the first time beyond the Japanese cars, European cars, American cars and Korean cars in China's market share. Thus, it can be seen that China's protection of infant industries in the import quota policy support, has formed a certain degree of competitiveness, to achieve the desired goal.
IV. Prospect of the theory of infant industry protection in the new period
China began to implement reform and opening up in 1978, and has experienced three decades of reform and opening up, and the achievements made by the world's attention. during the past 30 years, China's economy has realized the world's rare average annual growth rate of 9.8%. China's gross domestic product (GDP) has jumped to the fourth place in the world, after the United States, Japan and Germany. At the same time, China's share of the world economy has risen significantly. With the rapid development of economic strength, so that the national living standards continue to improve, the country's overall strength continues to rise, forming a "China model" of economic development model, by many countries in the world to learn and adopt.
The success of the "China Model" is inseparable from the government's domestic industrial support policy. But at the same time because the support policy also has certain disadvantages. Such as: smuggling activities, the impact of the market order; protection measures to form a domestic monopoly leads to resource misallocation, a large amount of waste of funds, enterprise organizational structure and industrial structure is seriously irrational; domestic enterprises do not have the pressure of competition, the lack of improvement of technology, improve the management of the enthusiasm, objectively hindering the growth of infant industries, contrary to the original intention of the protection policy.
Therefore, in the new period, in view of China's existing national conditions, we can seek to protect China's infant industry from the following aspects of new ideas.
(I) improve trade legislation to strengthen the protection and support of infant industry policy norms and seriousness
Since the 1970s, the legal protection of trade protection has occupied an increasingly important position, the world's major trading countries have to formulate trade laws in favor of their own countries, many developing countries have followed suit in the " WTO accession", in the face of lower tariffs, reduce import quotas, relax foreign exchange control situation, in order to ensure that the country's domestic infant industry is not a big impact, so they have to strengthen trade legislation, the use of legal means to protect the national industry, so that changes in the trade system does not impact on the domestic industry is too large. This is not only in line with the WTO to the contracting parties to the openness of trade control requirements, but also play a role in the protection of domestic industries. Therefore, our country in the weakening of the WTO conflict with the obvious protection measures at the same time, should be taken in line with international practice of legal means to strengthen the protection of domestic infant industry, to safeguard the interests of the country.
(2) the use of government procurement system, support the development of infant industries
According to the experience of countries around the world, the support of domestic infant industries is a variety of means, the most commonly used is the "government purchase" approach. In accordance with the requirements of the WTO rules, government procurement can not be preferential treatment of domestic enterprises and discriminate against foreign enterprises, but in fact, both developed and developing countries, in varying degrees, the use of government procurement means to support the development of domestic industries, especially the development of infant industries. 1960s and 1970s, the development of Japan's computer industry is obviously by the government procurement of favorable support. During this period, the Japanese government required government departments and educational systems to prioritize the use of domestically produced machines. By 1982, its official market was equivalent to 18% of the overall domestic computer market, and the four major domestic computer manufacturers relied on the official market to the extent of about 30%. It can be seen that government procurement has played an important role in supporting the development of the Japanese computer industry.
(C) the establishment of a fair market competition mechanism, increase the intensity of market competition in the infant industry, the appropriate introduction of strategic partners
In order to make the infant industry as soon as possible to grow up, for the government, it is more important to create a good policy environment for the promotion of the development of infant industry. Practice shows that a fair market mechanism will promote competition, and the more intense the competition in the domestic market of a particular industry, the smaller the gap with the international advanced level, the higher the cost of entry of foreign competitors. Because of the existence of more producers, the fierce competition will prompt each enterprise to commit to market development activities, improve product quality and their own management level, so as to improve the overall competitive strength. At the same time, the appropriate introduction of strategic partners, optimize the combination of production factors, and actively absorb the introduction of foreign advanced technology and management experience, in order to quickly shorten the gap with the world's advanced level is an effective way to speed up the pace of development of the domestic infant industry. When the domestic infant industry has a certain degree of international competitiveness, should be withdrawn from its original protection policy, to guide its participation in the international market competition.
(4) the use of local advantages to establish a strong sales network, strengthen the creation and promotion of the brand
Enterprises are the micro-carriers of the infant industry, so the enterprise's vigorously innovate, improve product quality and technical content, and establish a national brand is fundamental. The country's infant industry has a very large geographic competitive advantage. Specifically, the establishment of a strong sales network to build brand loyalty is the best countermeasure for enterprises to take independently to prevent the entry of external competitors. Therefore, the establishment of a sound sales network is not only conducive to the creation of its own brand, but also effectively prevent foreign goods into the domestic market, that is, those who have entered the domestic market for foreign products, due to the lack of support for the sales network and customer loyalty, and often in the competition is also in a disadvantageous position.
V. Conclusion
The 30 years of reform and opening up, is China's economic development of 30 years, is China's comprehensive national strength and international influence from weak to strong 30 years, the rapid growth of the economy so that the total economy shows accelerated expansion trend. Reform and opening up 30 years, the reason why the trend of notable achievements, and the country's implementation of infantile industry support policy is inseparable.
At the beginning of opening up, the domestic industry because of the influence of the old system, the domestic enterprises do not have competitive pressure, lack of improvement of technology, improve the management of the enthusiasm, objectively hinder the growth of the industry, but also make consumers pay a high price. Therefore, at the beginning of the opening-up process, in order to protect the basic industries involved in the lifeblood of the national economy, the government had no choice but to implement the policy of support. With the deepening of the opening-up process and the deepening of economic exchanges with foreign countries, China was objectively required to implement a dynamic protection policy, and thus more flexible measures such as tariffs, quotas, government procurement, anti-dumping, etc. were selected as the first choice of China's propping-up policy. Driven by these measures, China's infant industries develop rapidly, rapidly grow their own strength, bigger and stronger, to achieve the original intention of the protection policy.
In today's rapid development of economic globalization, it is very important to deal with the relationship between economic openness and the protection of infant industry. Open protection of infant industries is not to exclude competition, but to introduce dynamic protection of competition. This kind of protection should be short-lived and efficient, aiming at prompting the industry itself to produce a kind of self-growing ability, and improve labor productivity and competitiveness in the short term. After the industry has formed its own competitiveness, it should decisively give up excessive support and protection, so as to avoid the formation of "inertia" in the domestic industry, contrary to the original purpose of the support policy.
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