Andrews Term Paper Idea

Published on Author andrews

It is my intention to explore predatory trade policy, specifically between China and the U.S. I will define predatory trade policies, and explain several misconceptions relating to them. Often times the definition of predatory trade policy is controversial as the formal definition was developed by lawyers and may not be accepted by economists. The main focus within these trade policies will be whether or not China has an artificial comparative advantage in its industries when compared with U.S. industries. It is possible that a Chinese comparative advantage is induced by acceptable operating procedures in China. I will explore these ideas and eventually claim whether or not I believe that China has an artificial comparative advantage over the United States. If I find that China does have a comparative advantage, I hope to recommend a feasible policy suggestion.

2 Responses to Andrews Term Paper Idea

  1. Definitely seems like a great topic to investigate. Watching the Presidential election this year especially, I saw that this was a very hotly debated and talked about topic.

    I am very interested to find out (if I ever do) just how “artificial” Chinese advantages are. Even though Professor Smitka mentioned that you should stray away from looking at exchange rate, that is another very interesting component to the whole topic you are delving into.

  2. This is a tough topic, because deliberately shifting comparative advantage is not straightforward. In what industries does China have strength where standard comparative advantage stories would suggest it should not? Trade involves lots of high-end consumer electronics, but this reflects importing chips and displays and exporting assemblies.

    Dumping as you note is a legal definition, not an economic one. If China wants to subsidize exporters then shouldn’t we say “the more the better”?? After all, the ultimately goal of an economy ought to be supporting consumption, not production.