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From Comparative Advantage To Competitive Advantage: On China's Foreign Trade Development Of Strategic Change

Posted on:2004-07-23Degree:MasterType:Thesis
Country:ChinaCandidate:Y K XuFull Text:PDF
GTID:2206360092487777Subject:Political economy
Abstract/Summary:PDF Full Text Request
From 18 to 19 century, the classic economists, Adam Smith and David Ricardo, founded the Theory of Comparative Advantage, after perfected by Eil Filip Hechscher and Beltil Gotthard Ohlin, spread by Vassily W.Leontief, it formed the mainstream of the international trade theory and became the academic basis of the foreign trade around the world, especially the developing countries. However, with the advance of the intellective economy and economy globalization, international trade has been changed distinctly and the Theory of Comparative Advantage shows critical defect. The developing countries guided by the Theory of Comparative Advantage have been fallen into "the trap of the comparative advantage". As for our country, how can we clap "the trap of the comparative advantage". How can we develop our foreign trade better, promote the industrial structure and develop our economy in the round? All of these become the question our people focus on. These are also the original intention of the author. After comparing the two theory and analyzing comprehensively the economy trade, the author makes a conclusion: We must keep up developing the comparative advantage vigorously and realize the stratified transformation from the comparative advantage to competitive advantage step by step.Part I : The author makes a detailed comparison between these two kinds of theory and gets a objective appraisement. The Theory of Comparative Advantage emphasizes on the function of "the invisible hand". It enhances the development of the free trade and explains the industrial spatial structure successfully. However, it ignores the adjustment of the industrial structure, the progress of the technology, the innovation of the system and this kind of dynamic trade internets. With the development of the international trade, the theoretical premise of the complete competition and non-scale economy do not exist any more. It can't explain the industrial trade phenomenon more and more widely. Products with comparative advantage can not surely be export products. Conversely, based theoretically on the uncompleted competition and scale economy, the Theory of Competitive Advantage not only makes emphasis on the competition at domestic market, innovation system and the role of the government and domestic need, but also gives perfect explanation about the industrial trade. In a word, we conclude that the Theory of Competitive Advantage is more suitable for the international trade and has more practical significance than the Theory of Comparative Advantage.Part II: The author analyses the formation of "the comparative advantage's trap" and the inadaptability comparative advantage's strategy in our future economy. On one had, the products with comparative advantage may lack the competitive advantage and can not be the real export products. On the other hand, the complete competition and the theoretical premise of the complete competition and non-scale economy will not exist any more. Country becomes the principal part of the trade, but the principal effect of the enterprise is ignored. As a result, "the comparative advantage's trap" appears. At the same time, throughHIthe concrete analysis, we discover: our country's comparative advantage has been weaken, the big country's economy limits the development of the comparative advantage, it is difficult to continue the comparative advantage of labor-concentrated products. In addition, the style of world trade has been transferred to high-technology products and the comparative advantage strategy won't be adaptable in the future economy. So, the strategy of our foreign trade must be adjusted. We must carry out the competitive advantage strategy instead of the comparative advantage strategy.Part III: The author reasoned the beneficial conditions and restrictive factors about our country's practicing the competitive advantage strategy. First, the objective conditions are more and more mature: the domestic economy keeps on rapid development, the comprehensive strength keeps on intensifying, the wh...
Keywords/Search Tags:Comparative Advantage, Competitive Advantage, Strategy Change, The Comparative Advantage Trap, System Creative
PDF Full Text Request
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