The Impact of Protectionism: Examining Economic Growth and Domestic Industry Protection – Response

The Impact of Protectionism: Examining Economic Growth and Domestic Industry Protection – Response

You have defined protectionism very well using a simple sentence, the economic policy of restraining trade between nations (Satterlee, 2018). The purpose why governments regulate imports, quotas, and impose high tariffs on imported goods is to protect the domestic industries against competition from foreign companies or foreign takeover. In order to control foreign direct investment, the government uses these limits and barriers. The example of China clearly shows how these limitations can be used to control foreign investment and competition from imported goods.

The article you have selected as a reference shows the effect of protectionism on a country’s economic growth and prosperity (Enderwick, 2011, pp. 325-336). I agree that China’s fast rise to economic success was as a result of the country’s huge reliance on its domestic industries and domestic integration. Through the development of the local businesses and buying goods locally, a country is able to generate enough funds for industrialization and to create employment opportunities for its citizens, improving the living standards in the country.

References

Enderwick, P. (2011). Understanding the Rise of Global Protectionism. Thunderbird International Business Review, Vol. 53, Issue 3, 325-336.

Satterlee, B. C. (2018). Cross Border Commerce: 3rd Edition. Raleigh, NC: Synergistics International Inc. Yin, X., & Wang, Z. (2014). Revisiting the Role of Regional Integration in China from 1978–1992: Incentive, Pattern, and Growth. China Economic Journal, Vol. 7 Issue 2, 261-276.