Msc International Business
BMG827 Business Research Methods
Dr Trevor Morrow & Dr Cecilia Hegarty
“Literature Review Assignment”
For this assignment you are asked to complete a 2000 word literature review on a topical area in International Business. You are to include at least 15 sources on your topic. Half of your sources must be journal articles or books. You may use credible web sites as well as interviews. Papers should comply with Harvard Referencing Style
18th March 2013.
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The Development of China’s International Trade Policy
China’s Trade Performance
Summary & Conclusion
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I have chosen International Trade as a topic for this literature review, with focus on China’s international trade, both past and present, as it has experienced rapid expansion together with its dramatic economic growth. The somewhat stable political system, vast natural resources and an abundant labour resource in China have made it a modern global industry.
Discussions of the role that international trade plays in promoting economic growth and productivity in particular, have been on-going for decades now. This literature review demonstrates that being internationally active tends to be more productive than just producing for the domestic market.
Due to liberalization and globalization, a country's economy has become much more closely associated with external factors such as openness. Thus, conducting a study on the effects of international trade on economic growth is of great significance in this globalized market. It helps policymakers develop the appropriate policies by determining the source of productivity growth with respect to international trade. Since the launch of economic reforms and the adoption of the open door policy, international trade and China’s economy have experienced dramatic growth. China’s integration into the global economy has largely contributed to its sustained economic growth.
Some of the industries with comparative advantages began to acquire a high level of specialization, and China has achieved a high growth rate of GDP, as well as an enormous inflow of hard currency and increased employment. Additionally, China’s participation in international trade has also contributed to improvement in productivity of domestic industries and advancement of technology.
On one hand, large imports of machinery goods in the early 1990s had an immediate impact on productivity through the application of technology within them. On the other hand, the level of science and technology in China increased dramatically due to the effect of “learning by doing.” Therefore, research on how international trade contributed to China’s economic growth can serve as a high level case study demonstrating how a latecomer catches up with the leaders by increasing its participation in the global market place.
Empirically, there appears to be good evidence that international trade affects economic growth positively by facilitating capital accumulation, industrial structure upgrading, technological progress and institutional advancement. Specifically, increased imports of capital and intermediate products, which are not available in the domestic market, may result in the rise in productivity of manufacturing (Lee, 1995). Increased active participation in the international market by promoting exports leads to more intense competition and improvement in terms of productivity (Wagner, 2007).
Learning-by-doing may be more rapid in export industry thanks to the knowledge and technology spill over effects. In addition, the benefits of international trade are mainly generated from the external...