Political economy of trade protection: China in the 1990s

More than three decades have passed since Deng Xiaoping opened China to the outside world with a series of sweeping economic reforms. Yet, before China entered the World Trade Organization (WTO) in 2001, even at the height of free trade in the 1990s while lowering trade barriers overall, the Chinese government continued to protect some industries. This article explores the cross-industrial variation in trade protectionism in the 1990s, when the Chinese government was negotiating for accession to the WTO. It demonstrates that the major incentive of the Chinese government for trade protectionism was political, involving such factors as the state sector's inefficiency, the ease with which workers could organize to rebel, and bureaucratic organizations' pressure on the government on behalf of certain industries. The Chinese government chose to protect certain industries to prevent free trade from exacerbating social instability in the 1990s.