Answer to Question #263836 in Management for Mareeye

Question

International business is explained by many International trade and investment theories. Do you think that these theories explain trends in business adequately? As a point of focus-discussion, refer to the China’s competitive advantage in exporting Rubber Shoes and Bangladesh in exporting Garments.      

PLO

CLO

Level

 

3

5

Answer 1

China-

According to conventional international trade theory, effective resource allocation within the economic system occurs only when a country chooses to manufacture commodities and services with lower production costs. The country should import goods and services that have a higher manufacturing cost than those produced in their neighbor countries.From absolute advantage theory to comparative advantage theory and other theories connected to comparative advantage, the theories have evolved. These theories, on the other hand, emphasize on cost advantage and specialization, which may or may not be applicable in the current environment of free trade and trade agreements. In Chine, natural rubber is a significant economic commodity.In this region, it is the primary source of revenue for small farmers and their employees.Currently, the automotive industry and tyre manufacturing consume over 70% of total output.Gloves, roller covers, mats, condoms, water bottles, protective apparel, and sports equipment are just a few examples of rubber-based products.

Bangladesh

This should be compared to the amount of comparable availability of other amenities for employees, other elements of industrial attractiveness, and government policies and implementations aimed at increasing industrial competitiveness. The European market's existence and expansion are dependent on it. As the MFA phase-out approached, it was expected that some Japanese companies would consider relocating from China to Bangladesh, where labour is not only cheap but also easily trainable. Because the country has cheaper labour than most other countries on the planet, industry, which has traditionally been a labor-intensive company, has been localized. Low wages have always been a major strength of Bangladesh's labor-intensive apparels industry.