China's Foreign Trade and Comparative Advantage
Author | : Alexander J. Yeats |
Publisher | : World Bank Publications |
Total Pages | : 112 |
Release | : 1991 |
ISBN-10 | : UCSD:31822008121790 |
ISBN-13 | : |
Rating | : 4/5 (90 Downloads) |
Book excerpt: This study undertakes a detailed analysis of secular trends in China's trade and "revealed" comparative advantage (RCA) for roughly two decades starting in the mid-1960s. The empirical analysis shows China has a revealed comparative advantage in a relatively broad range of products, and that almost all of these items are labor intensive in production or require inputs of specialized natural resource materials. Aside from Japan, Singapore and Malaysia, China's RCA profile resembles those of other regional economies like Indonesia, Philippines, Thailand and Taiwan which have largely built their exports base on labor intensive products. These data suggest that unless intra-industry trade is accelerated the potential for regional trade conflicts is greater than that for regional integration. The results suggest that China is currently one of the least mature of the Asian economies and that its future revealed comparative advantage will likely experience a high degree of change.