3. Conversely, it will import commodities in the production of which a relatively scarce and expensive resource is used.
As a developing country's trade pattern, H-O Theory predicts that China will be a :
International Trade
China's Exports and Imports
M
1. Brief Analysis of China's Imports And Et
3. Further Discussion: How to make the most use of Factor Endowment to develop international trade?
The total amount was increasing
Increasing speed of imports and exports
Value of exports and imports
Take the 2009 as an example
China's international trade
Soybeans; Metal ores; Crude petroleum; Special industrial machinery; Electronic microcircuits; Scientific equipment
(USD 100 million)
Heckscher-Ohlin (H-O) Theory of Factor Endowment
The Total Impression on the Economic Condition of Our Country
Developing
country 's trade
pattern
ABUNDANT
SCARCE
Large population
Well educated and
Less-skilled or Medium
1. Differences in relative factor endowments among nations underlie the basis for trade.
2. A nation will export the commodity in the production of which a relatively large amount of its abundant and cheap resource is used.
net exporter of less-skilled-labor-intensive products
Firstly, China's trade has been roughly balanced--the value of exports has roughly equaled the value of imports, even though both are growing rapidly.
The most important export products
Textiles and relative articles; Computers; Audio equipment; Shoes and other footwear
The most important import products
Why?
The main part of these production processes that China does is assembling the products together, and the assembling processes use lower-skilled labor intensively.
net importer of land-intensive agricultutal products; net importer of natural resources; net importer of skilled-labor-intensive manufactured products;
Secondly, much of its pattern of net exports and net imports of different products is just what Heckscher and Ohlin would predict.
Therefore, much of China's intenational trade is consistent with the HeckscherOhlin theory.
Trade
Export the labor intensive products
Materials and high-skilled labor intensive product
Thus, China is a net importer of the materials and components that go into those products and the production focuses on using its abundant less-skilled and medium-skilled workers to assemble the final products, and then export them.
High skilled labor
skilled labor
Arable land
Made in China
forestland
Huge land
. . .
physical capital
. . .
Difference in endowment Large population
less-skilled or medium skilled