The Theory Of Comparative Advantage, China's Industrial Development

Industrial development can be studied from different perspectives. Research in this field by the domestic academic community is generally restricted to the domestic division of labor and the optimization and upgrading of the three industries. In the context of the current economic globalization and China's entry into the WTO, it has become increasingly urgent and significant to study the adjustment and development of China's industry in terms of the international division of labor.This dissertation applies the extended theory of comparative advantage to analyze China's industrial adjustment and development. It is aimed to promote new thinking patterns for industrial adjustment and development by attempting to explore sources of comparative advantage. This dissertation also contains relevant regulatory proposals corresponding to the facilitation of the formation of comparative advantage and the identifying of its dynamic development trend. It is hoped that this dissertation will contribute to the thoughts and ideas put into the rational formulation of China's economic development strategies and related policies.This dissertation consists of the following seven chapters:Chapter 1 presents a general commentarial description of the existing research literature. Representative viewpoints in this regard are here generalized into four schools of thoughts - Comparative Advantage Strategy Theory, Comparative Advantage Traps Theory, International Competitiveness Theory, and Theory of the Unsuitability of Comparative Advantage. This chapter analyzes and introduces the contributions of each of the above four theories and their limitations, which constitute the starting point of the analysis in this dissertation.Chapter 2 provides the theoretical foundation of this dissertation. Based on the analysis of the meaning and law of comparative advantage, this chapter illustrates the sources of comparative advantage and then extends the comparative advantage theory, thereby providing a theoretical framework and analytical basis for the application of the comparative advantage theory to China's industrial development. This dissertation also attempts to provide the methodological basis for the dissertation by discussing the methodologies of the research and application of the comparative advantage theory. Major theoretical viewpoints covered in this chapter are: traditional trade theory and modern trade theory canbe integrated to a certain extent if judged from the sources of comparative advantage; the international trade theory, especially its extended factor endowment theory, can be a useful analytic framework for the study of China's industrial development.Chapter 3 offers an empirical analysis of the evolution of China's industrial structure. This chapter analyzes foreign trade development and trade structure growth. It contains positive analysis of the shift of the revealed comparative advantage among industries, and demonstrates the fundamental trends of the evolution of China's industrial structure, thereby providing empirical basis for the subsequent analysis of the development of China's factor-intensive industries and China's migration of industries. Main conclusions of the positive analysis are: unskilled labor-intensive industry remains the most competitive in China at present; the international competitiveness of China's industries has shifted from unskilled labor-intensive industries to moderately skilled labor-intensive industries, which has been evidenced by the increased competitiveness of industries represented by machinery and transport equipment; from the perspective of factor endowment, this shift simply means that the competitiveness has moved from unskilled labor-intensive industries to the links of the labor-intensive production chain in the capital- and technology-intensive industries, rather than a complete industrial upgrade.Chapter 4 tackles the causes of the shift of China's exporting competitiveness among industries. On the basis of the analysis of the interrelation between exporting co...