After China was admitted into WTO, oceans of exotic products flooded in Chinese market and Whopping numbers of foreign companies entered China to wrestle for one share. As a result, many domestic enterprises have to face an ever more fierce competition. Some argue that allowing for the incompetency of many domestic companies comparing with many international brands, we should buy domestic products rather than other countries’ products even at higher cost. However, others refute that this kind of protectionism is harmful to both domestic economy and consumers.
Firstly, such action apparently breaches the rules of market and counteracts all the effort made by Chinese government to establish a complete market-oriented market. Under market mechanism, competitive companies and products are apt to obtain more resources. By this way, well-managed companies and high-quality products are selected out and thus resources are utilized to its utmost.
Further more, on the contrary to what most proponents imagine, domestic enterprises will fall victim to this overprotection rather than benefit from it. Without competition and comparison, they will lose the motivation to cut down the cost, improve their managerial skills, elaborate their products providing that they can win customers in void of more efforts. It is not difficult to deduce that domestic companies will deteriorate in its competence even further and become vulnerable in the process of globalization. Take an example of many state enterprises in early 90s, when government tried to protect them from the impact resulted from Reform and Opening policy. The attempt to pop up the state companies ended up with the fact that many companies were more inefficient and wasted a lot of national resources.
Besides, it strikes me as a kind of impairment of consumers interests. It is rational for consumers to buy those which are superior in quality and favorable in price. It is legitimate for consumers to pursue the most utility out of the money they yield.
All in all, I think the proposal to buy products from their own country even they are of higher cost and refuse the alien but better ones is unconscionable. Such action will harm the interest of the nation’s economy and the customers as well. Meanwhile it is less likely that domestic enterprises will benefit from it in the long run.