Trade Policy and Industrial Competitiveness: A Comparative Econometric Analysis of China and Turkey

This study explores the pivotal role of trade policy in boosting the economic competitiveness of developing countries, and compares the lessons learned from the experiences of China and Turkey. Trade policy is one of the key policy instruments for structural change in the modern global economy, but the results of liberalisation are not uniform across emerging markets. The study employs a panel data regression methodology (Fixed-Effects model) and World Development Indicators (WDI) from 2000 to 2023 to examine the effect of major trade instruments – such as tariff rates, trade openness and Foreign Direct Investment (FDI) inflows – on economic competitiveness, measured through GDP per capita. The empirical results suggest that a lower tariff rate is robustly correlated with higher level of competitiveness, but the "liberalization dividend" is highly dependent on domestic factors such as human capital development and institutional quality. The results highlight the need for strategies of openness to be combined with targeted industrial policies in order to achieve sustainable trade successes. The article concludes with actionable recommendations for the Republic of Uzbekistan, based on the comparative analysis, and a roadmap for future trade reforms and integration in global value chains.