Mercantilism or free trade。 China。 重商主义与自由贸易,以中国为案例.docx

Postgraduate Coursework CoversheetPlease attach to each copy of your workStudent Number:2215657Course Title:____the wealth of nation_________________________Essay/Assignment Title:___Mercantilism or free trade of Adam Smith, which is better for a developing country? — take China in globalization as a case to studyCourseCo-ordinator:____Craig.Smith__________________________Date of Submission:_______29th March___________________Word Count: _____3668________________________I confirm that I have uploaded my electronic copy to the course Moodle before handing in this paper copy√Mercantilism or free trade of Adam Smith, which is better for a developing country? — take China in globalization as a case to studyIntroductionMercantilism has dominated in Europe since 16th to 18th century and its core spirit was for a country’s wealth accumulation. Despite its feature had two different stages and its main thoughts had changed slightly, its purpose was still to accumulate wealth, and it appealed the government to use political means to control the movement of moneyto achieve the wealthy accumulation purpose and make the country richer (Smith 1776).Compare with Free trade which was based on Adam Smith’s argument of division of labour (which leads to specialization, greater efficiency and higher aggregate production). (Free trade 2015).Smith considered that markets should be controlled by an invisible hand, not the government. The intervention of government on business and the free market will cause interferences and of reduce the economic efficiency, eventually make the public pay a higher price (Smith 1776).Similarly, based on some previous studies, most economists thought that free trade could affect economic growth by moving goods, services, capitals and labour (Spanu. 2003), and it is a key to drivea country to prosperity (BIS. and DFID. 2011: 3). OldChinawas rich by running domestic business and farming domestic land instead of trading with neighbor countries (Smith 1776). H