| Abstract | China’s foreign investment systems conduct strict regulations on the behavior of FDI by multinational corporations, such as " Regulations on Foreign Investment Direction " and " Guiding Catalogue of Industries for Foreign Investment ", In this situation, how do the government guarantee the effectiveness of export tax rebate and tariff policy? And what effects will the administrative monopoly system, which restrict FDI and multinational companies, produce upon the economic performance? To solve these questions, this paper does the theoretical research through building a dynamic model of North-South national trade. The results show that: 1) The export tax rebate can provide effective incentive on exporting, compared with the tariff policy, it is a relatively independent and moderate trade policy ; 2) Since the optimal tariff policy is closely related to administrative monopoly system, the government must take an overall consideration in the use of these two policy instruments, instead of treating them separately; 3) Administrative monopoly can enhance domestic social welfare and local corporate profits, but at the cost of raising the market price and damaging consumer surplus, which is a typical " beggar-thy-neighbor " system. |