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Abstract
This paper argues that China is adopting Neo-mercantilist policies in its national development and global expansion. China's Neo-mercantilist strategies include promoting nationalism and patriotism, stockpiling gold and foreign reserves, striving for favorable balance of payment via exchange rate manipulation, tariff, export subsidies and other trade protections. The Chinese government also controls population growth for national development and social control, initiates "Belt and Road" project and the Asian Infrastructure Investment Bank to counter American and Western influences, and deploys strategic expansion in Africa, South Asia and Latin American countries. China's economic success through Neo-mercantilist strategies may provide an incentive for other Asian developing nations such as the Philippines to follow.
Keywords: Mercantilism, Neo-mercantilist policy, China's economic development, international political economy
1.Introduction
China pursuing Neo-mercantilist policy in global expansion is generally known (Beeson, 2009; Ayittey, 2010; Atkinson, 2011; Zhang, 2016). In particular, Hawkin (2005) argues that China's economic development strategy is a new version of Mercantilism. Likewise, Beeson (2009) observes that "China is actively embracing elements of Neo-mercantilism and state interventionism" in international economic affairs. Yerma (2016: 5) comments that "China is the modem world's most successful Mercantilist state". Ayittey (2010) even regards China's involvement in Africa as "Chopsticks Mercantilism". Though there are numerous commentaries on Chinese Mercantilism, an in-depth study on China's Neo-mercantilist policy in its national development and global expansion is lacking. This study fills this gap. This paper starts with an introduction of the doctrine of Mercantilism, and is followed by a comprehensive account of China's Neo-mercantilist policies in its national development. The last section will summarize the arguments.
2.The Doctrine of Mercantilism
The term "Mercantilism" was coined by Victor de Riqueti, marquis de Mirabeau in 1763, and was popularized by Adam Smith in 1776 (Yerma, 2016). Mercantilism is an economic and political doctrine developed in Western European countries between 1500 and 1800 in which statesmen, policymakers and merchants seek to increase wealth through state action. According to Encyclopedia Britannica, Mercantilism is described as "economic theory and practice common in Europe from the 16th to 18th century that promoted governmental regulation of a nation's economy for the purpose of augmenting state power at the expense of rival national powers". Similarly, McCusker (year unknown) defines "Mercantilism as a set of policies, regulations and...