In: Economics
differentiate between mercantilist and liberalist theories, critically analyising the extent of these IPE theories adopted by china
Mercantilism | Economic Liberalism |
Mercantilism is an IPE theory which focuses on maximising exports and minimising imports for a nation | Liberalism is an IPE theory that believes in supporting a market economy and private liberties. |
This theory believes in using trade as a measure for national benefits | This theory believes in absolute growth of a nation's wealth |
There might be conflicting interests | Liberalism believes in shared interests |
China's mercantilist growth strategy over the years have been about
maintaining export boosts through low currency exchange rates.
Mercantilism has given China the platform to be a net creditor to
other nations and thus grow as an economic superpower.
Whereas, China also supports a market economy based socialistic
culture wherein the government does intervene, but there is also
equal and parallel support to the concept of private/individual
ownership, hence the shared interests of both the dominant state
and private consumers.