TOPIC: Should governments seek to protect “strategic industries”?
Strategic Industry is an industry an industry that a country considers very important for its economic development, growth, safety and stability. It also contributes a major share to the GDP and employment rate of its country. The characteristics of as strategic industry are that it has a relatively higher rate of employment, higher growth rate, higher technological levels, more of competitive advantage over other nations, higher labor productivity, it is more powerful than other nations in terms of defense and strategy, bigger scope of growth and also better economic benefits than other industrial sectors worldwide. Therefore due to so many reasons most of the countries define their countries as strategic industries. A strategic industry is necessary for its national defense. They tend to have some degree of protection especially in the case of war. It is important for a nation to have domestic resources as during a war the trading activities might get cut off. Basically strategic industries consists of those industries which have higher rate of growth and also lead to higher rate of economic growth and stability, secondly those industries which significantly add up to the GDP of a nation and lastly, those industries which promote significant externalities to the economy.
To support the argument there are few relative examples that would support the statements: “The Chinese government wants the seven strategic industries to generate 8% of China’s GDP on 2015 and 15% by 2020” – Zhang Xiaoqiong (vice-minister of National Development and Reform Commission).
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