Two Major Relative Comparative Advantages of China in International Trade

Abstract

Sustainable development requires enriching and developing the traditional international trade theory, especially integrating the environmental elements into the current analysis framework of relative comparative advantages. These relationships among labor, capital, and environmental resources are analyzed in this study, using the relative comparative advantages method. As indicated in the analysis, the ever-increasing international trading volume in China relies not only on the relative comparative advantage of labor but also on the environmental one; these are the two major advantages in China. However, the two advantages will experience serious challenge in the future along with a rising cost on labor and environmental pollution.