With China's Export-oriented Economy Research Dynamic Comparative Advantage

We have been developing our outward-oriented economy in accordance with thestatic comparative advantage since the reform and opening up in1978. Specifically,we have been exporting a great deal of labor intense products, encouraging thedevelopment of processing trade, and competing in the international market by lowprices. To be honest, the static comparative advantage has made significantcontribution to our country as it has increased the GDP, created jobs and accumulateda lot of foreign exchanges. However, with the development of our country, oureconomic situation has changed a lot since1978, and the static comparative advantageis no longer suitable for future development. This paper has shed light on thecharacteristics and dilemmas of the static comparative advantage orienteddevelopment, and concluded that it can’t sustain for long.Dynamic comparative advantage theory has carried on the static comparativeadvantage theory but admits that the comparative advantage of a country isn’t staticbut dynamic. This paper has pointed out that capital stock, technological capabilityand human capital of both the internal economy and the export of our country havebeen improved, which means dynamic comparative advantages exist in our economy.Therefore, dynamic comparative advantage theory is more suitable for our economicdevelopment and we should follow it.