GCSE Economics 8 mark essayWatch
d) Discuss the likely impact of increased protectionist measures on economic agents in a country of your choice.
(start of essay)
Protectionism is the presence of barriers to international trade designed to limit imports into a nation. These would include : tariffs, quotas and embargoes.
Protectionism for a country such as China could be beneficial. By placing measures such as tariffs the Chinese government could benefit from additional tax revenue. This additional tax revenue could be re-invested to subsidise Chinese exporting firms. Subsidising Chinese exporting firms means that the cost of production for these firms will most likely fall , the firms are now able to export goods at a lower price, making Chinese exports more competitive, allowing China to gain a larger hold of the global market share. This could lead to export lead growth. Greater economic growth means that jobs will be created , higher employment helps meet the Chinese's goal of full employment. Overall this will lead to China being able to access the benefits of globalisation better.
It should also be noted that China is a large export led economy. It is possible that through imposing their own protectionist barriers to foreign imports , other countries may do the same to Chinese exports. Foreign importers may then choose to demand an alternative such as German exports. This would mean that demand for Chinese exports will fall , creating job losses as firms do not require the workers as much. The Chinese government will receive lower tax revenue from people. The lower tax revenue will mean that Chinese firms that rely on subsidies may no longer receive grants from the government. Leading to Chinese firms possibly failing and growth receding.
To conclude even though there is the possibility of consumers choosing alternate goods from other countries as a result of China's protectionist measures. It should be considered that countries such as the U.S who have the largest balance of payment deficit will continue to rely on China's imports. This reliance means that China will continue to have a reliable trading partner. Meaning that China will be able to succeed even with an increase in protectionist measures.
What would I talk about in the third paragraph.
Also spoilers :
For anyone curious I got 5/8 marks here.