When the latest economical growth and development of new emerging countries is discussed, two countries' names emerge from nowhere. These are India and China. The growth in the trade sector of these two countries is surprisingly enormous. If this is partly due to development in the area of science and technology, there is much also that goes for a number of reforms, changes, and redefinition of trade policies and international trade relations. Moreover, there is much on the credit of Chinese distinctive cultural and management practices which makes this country a unique case study (Menkhoff and Gerke, pp. 87-89, 2002).
The present paper looks at the issue of the development of China in the business world of the recent times; China is "likely to demand a strong voice in the WTO" due to its major role in present day trade operations (Kennedy, p. 75, 2002). The paper, hence, undertakes extensive research to investigate the causes for the development of China in trade regimes. The paper explicitly brings forward the number of theories of trade which have anyhow any link to the present growth of China in worldwide trade.
At the end of the paper, the study analyses the data qualitatively and makes suggestions and recommendation in the light of the causes of trade growth of China. These suggestions and recommendations are meant to contribute to the existing literature of trade theories and development; as well as, they focus to contribute to a broader understanding of Chinese growth. They are also meant to focus those countries which may need to follow China for the economical growth.
Trade Theories Reviewed
A number of theorists have worked out different theories of trade to cope up with the challenges of trade. These theorists have asked such questions as can help trade to be more profitable, more expedited, more powerful, and so on. This section reviews major trade theories in order to bear a groundwork which is, according to the viewpoint of the present writer, necessary to comprehend China's growth in the recent scenario of trade.
Classical economist seem to have defended the Mercantilists' view that the export of a country should be put to as much increase as possible; on the other hand, the imports of that country should be put to as much decrease as possible. According to Grimwade (2000), it was obviously possible only for one country because "one country's export surplus is another country's import deficit" which makes import and export both a requisite function of across-border trade (p. 30). Another objection was made to Mercantilism was that dumping large reserves of gold does not make a country wealthier because gold does not provide the citizens for "goods which could satisfy their wants" (p. 30). Thus, this trend met a death due to its zero-sum philosophy of trade. Next is the comparative advantage. According to this theory (by Smith), differences in costs as the bases for business are identified. To this Grimwade