A Study Of Comparative Advantages Of Sino-Australian Services Trade And Cooperation Optimization

With the development of the world economy, the service industry is playing a more and more important role and more and more studies have been made on whether the theory of comparative advantage is applicable to the service trade. Most scholars believe that the modified theory of comparative advantage is helpful to the explanation of the emerging service trade. They think that based on the traditional theory of comparative advantage, countries should take advantage of their own factor endowment when they determine the structure and the developing direction of their service trade. However, the fact that comparative advantage in service trade is dynamic shows that comparative advantage of one country is not static. So countries can work out corresponding internal and external policies to positively influence the dynamic development of comparative advantage. Thus, considering that Sino-Australian economic and trade relations have become closer and closer in recent years, the author of the paper attempts to find out whether there is possibility of optimizing cooperation between the two countries whose service trade is at different stages of development at present.The studies in this paper are in compliance with this guideline. After analyzing the service trade comparative advantage of China and Australia with the help of several comparable indicators, this paper summarizes the similarities and differences between the two countries, explores the reasons, and then draws the conclusion that there is feasibility of optimizing cooperation in service trade between the two countries. Policies following the dynamic evolution path and the status quo of comparative advantage in bilateral service trade are recommended as the conclusion of the paper.The paper consists of four sections. In the first section, a brief introduction to the background, the aims of the studies and the main ideas of this paper are given. In its second section, this paper demonstrates the fundamental theory. The third section, which is the main body of this paper, through various quantitative index analysis (which includes the framework analysis, TC analysis, RCA analysis and NXRCA analysis) and qualitative analysis, gains a deep understanding of the features and the comparative advantages in the fields of service trade of the two countries. Finally, the forth section includes the dynamic evolution routing in service trade and some policy recommendations. Several cooperation types are suggested for the two countries in the development of their service trade.