why chinas economic policies are seen as neomechantilistSolu

why china\'s economic policies are seen as neo-mechantilist?

Solution

Merchantilist believes that a country must increase its export and reduce import so that trade balance remains positive. Recently, it has been observed that china is also following same policy by increasing its export and reducing imports. China is artificially keeping value of its currency low thereby its export is becoming competitive and low value of its currency is discouraging imports. China has mammoth foreign exchange reserve. Hence, china is called neo-Merchantilist.