Endogenous Comparative Advantage Theory and China's Trade Structure Transformation

Author: Zhang Yabin
Publisher:
Publish Date: 2006-12-01
Features: While the total volume of China's foreign trade has expanded rapidly, its structure has also undergone corresponding changes. However, there exists a "paradox" in the development of China's foreign trade—namely, the upgrading of trade structure seems unrelated to the evolution of comparative advantage, and the intensification of trade structure has not led to an improvement in trade terms. This raises two questions: First, does China's participation in international division of labor and trade still need to follow the principle of comparative advantage? Second, how can China further achieve the upgrading of its trade structure under the new trade landscape. Endogenous comparative advantage theory is the cornerstone of modern analysis of international division of labor and trade. This book is based on this theory to elaborate, pointing out that the transformation of China's foreign trade landscape must be based on the endogenous evolution of comparative advantage. Integrating innate comparative advantage with acquired comparative advantage, achieving dynamic docking and spatial reorganization of various advantages, thereby promoting the endogenous evolution of China's comparative advantage and the transformation of its foreign trade structure. Endogenous comparative advantage theory is the cornerstone of modern analysis of international division of labor and trade. This book is based on this theory to elaborate, pointing out that the transformation of China's foreign trade landscape must be based on the endogenous evolution of comparative advantage, integrating innate comparative advantage with acquired comparative advantage, achieving dynamic docking and spatial reorganization of various advantages, thereby promoting the endogenous evolution of China's comparative advantage and the transformation of its foreign trade structure.