The Theory Of The National Competitive Advantage And The Application In China

What determines the position of nations in the field of international trade, or even in the field of international economic? What is the secret of the success of the dominant nations? How can the disadvantaged countries turn defeat into victory? Why a certain industry of the country can lead the world, while some industries are backward? This series of problems confused Economists in the different age. The theory of national competitive advantage which introduced in this article answered the above queries largely.What I firstly introduced is how the traditional economics theories explain the causes of competitive advantages. From Adam Smith and David Ricardo, people began to accept the comparative advantage theory, which tells us that the differences of national labor production and the difference of elements resource are the sources of national competitive advantage. For a long time, the theory explains many industrial trade patterns, and has been treated as guiding principle of international trade. However, with the developing of science and technology, the importance of the factor cost is decreasing, the comparative advantage theory and elements theory encountered numbers of unexplained issues.The economics of scale theory which built on the comparative advantages although successful explains the reasons of trade while the difference in comparative advantage does not exist, and explain...