For international trade, discuss your country’s absolute advantage, comparative advantage, and opportunity costs. What are the main goods or services that your country export? What are the products that your country imports? Do you think that your country can produce a particular good rather than having it imported? Explain.
Trade is very important in the modern world. Thanks to globalization, nowadays countries can enjoy a great variety of goods and services that they can import and export. However, we need to remember, that different countries have different resources and opportunities.
The country in which I live, and which will now be discussed is China. It is a well-known fact, that his country’s population is the biggest in the world. This is the reason, why China has an absolute advantage in manufacturing all kinds of products and providing all kinds of services where a huge number of employees is required. Also, China, just like Thailand and Vietnam, has an absolute advantage in producing and exporting inexpensive goods because of the low unit labor costs (MBN, n.d.). When we speak about the comparative advantage, for China it is just about the same. For example, this country has a comparative advantage in assembling iPhones (HarvardPolitics, 2013), which happens exactly because of the huge number of workforce available and relatively low prices. This helps international companies (in our example, it’s Apple Inc.) take advantage of the supply chain efficiencies to lessen their expenses.
According to the Observatory of Economic Complexity (n.d.), China mostly exports computers, office machine parts, broadcasting equipment, and integrated circuits to South Korea, Japan, the US, Germany, and Hong Kong. Speaking about imports, the top of them are iron ore, soybeans, crude petroleum, and cars going from South Korea, the US, Japan, and Germany. I believe that China could produce cars instead of importing them because this country nowadays has a great capability of manufacturing good quality automobiles in their own factories, as well as a huge workforce. There are many not famous internationally, but definitely worthy types of Chinese brand cars that I see outside every day. Some of them belong to my friends, so I can see, how good and comfortable these cars are.
References
MBN. (n.d.). Absolute advantage – definition and meaning. Retrieved from https://marketbusinessnews.com/financial-glossary/absolute-advantage/
HarvardPolitics. (June 25, 2013). The Comparative Advantage of Nations: How Global Supply Chains Change Our Understanding of Comparative Advantage. Retrieved from https://harvardpolitics.com/the-comparative-advantage-of-nations-how-global-supply-chains-change-our-understanding-of-comparative-advantage/
The Observatory of Economic Complexity. (n.d.) China. Retrieved from https://oec.world/en/profile/country/chn