Lead:

Why is it that the economically developed United States cannot compete with China in its manufacturing industry, and why is "Made in America" not as good as "Made in China"? To understand this question, it is necessary to involve comparative advantage in economics. The reason why "Made in China" can be popular in the United States is because of the comparative advantage of China's manufacturing industry over the United States.

According to Digital Business Times magazine, this story is reported:

American Dale Shotwell was surprised to find that most of the 40 Christmas gifts he bought were "made in China", and even the Christmas card was printed with "made i."

Chi

a”。

Coincidentally, the author of the book "A Year Without "Made in China" - Sa

a Bo

gio

Ms. I discovered that 25 of the Christmas gifts she bought in 2004 were labeled "Made I."

Chi

a", only 14 pieces were not made in China. So she tried not to buy "Made in China" for a year after that, this year Bo

gi

Ms. I was in a very miserable situation, arguing with her family while shopping, so at the end of the book, she tells the reader that it is possible to live without Chinese products, but the family expenses will increase and life will become difficult.

In recent years, most Americans have been like Bo

gio

Ms. I, like her, has gotten used to and accepted "Made I."

Chi

Whether it's in a supermarket or a large shopping mall, it's almost impossible to find true "Made in the USA."

Americans no longer have as strong "pride and prejudice" as Europeans, they no longer feel that "Made in China" is synonymous with cheap but poor quality, and people rarely pay attention to the "Made I" printed on product labels, except for those high-level people who are particularly particular about life

Chi

a" or "madei."

Ame

ica”。 People can buy American brands with "Made in China" printed on them, knowing that they are still designed in the United States and only made in China. This buying habit is not to covet a cheap price, but to "make i."

Chi

A" already occupies most of the containers, and it will take a lot of trouble to find the real "Made in the United States".

At the end of 2008, the United States is about to usher in the biggest shopping season of the year - Christmas, although shrouded in the shadow of the financial tsunami, Americans still start to run to major shopping malls and department stores early to buy Christmas gifts. They found that most of the goods in the malls they went to were still "made i."

Chi

a”。

As a result, some Americans with a national spirit began to advocate "Buy Ame."

ica

In order to revitalize the country's manufacturing industry, increase domestic employment opportunities, and alleviate the impact of the U.S. economic recession on the whole society. They believe that every citizen can help their country survive this unprecedented crisis by buying American products, and they are also calling on American brands to move their factories back home to provide more jobs.

As a result, various media began to review and publicize the inferior history of "Made in China", so that more people would buy products made in the United States. In Minnesota, local** initiatives are being launched to support the local economy by actively buying local products during the Christmas shopping season. Their recent report, "Made in Minnesota: Advancing the Minnesota Economy in Difficult Economic Times," found that if everyone spent 1/4 of their Christmas spending on locally made Minnesota products, the local economy could generate more than $2 billion in revenue, with the potential to increase local employment.

However, the chairman of the American consumer tracking company, B

ittBeeme

Not optimistic, he said that although 63 percent of people in this year's survey said they would buy local products, only one-third of the 61 percent of residents who said the same last year actually bought locally made products as planned. On the one hand, there is a lack of advertising for these local products, and more importantly, the reason for this is to buy "madei."

Ame

ICA is not as simple as it seems, not only does it require higher consumer spending, but it also has to pay more time to find the real "Made in America".

When Dale Shotwell bought Christmas gifts for his grandchildren this year, he found that the vast majority of the 40 gifts he bought were "made in China", two from South Korea, two from Singapore, and even the Christmas card with "made i" printed on it

Chi

a”。

He visited major retail stores and almost all of the big malls, and it was hard to find the real "Made in America." Shotwell's experience today with Bo

gio

Ms. I was very similar four years ago, despite the financial tsunami that American society was like "buyAme."

ica

and "buylocal" initiatives are growing, but people are still finding more and more "made i" in Christmas gifts

Chi

a”。

Seeing the above report, readers will not only think: why is the economically developed United States, but its manufacturing industry cannot compete with China, why is "Made in America" not as much as "Made in China"? To understand this question, it is necessary to involve comparative advantage in economics. "Comparative advantage" means that if the opportunity cost of producing a product in a country (as measured by other products) is lower than the opportunity cost of producing that product in other countries, then that country has a comparative advantage in producing that product. The reason why "Made in China" can be popular in the United States is because of the comparative advantage of China's manufacturing industry over the United States.

Taking the production of clothing as an example, production requires input of resources, and the garment industry is a labor-intensive industry that requires a large amount of labor, and these human resources can also be used to produce other goods. However, due to the particularity of resources in different regions, production cannot be taken into account, and the so-called substitution of production inevitably occurs. In order to produce clothing, the United States has to produce fewer other products, such as computers. This is the opportunity cost that we mentioned earlier. The opportunity cost of clothing is expressed in terms of computers, which is the number of computers that can be produced using the labor force that produces a certain number of garments.

Let's say the U.S. produces 30 million outfits for Christmas. If the labor used to produce these garments were used to produce computers, 200,000 units could be produced. So, the opportunity cost of these 30 million outfits is 200,000 computers. Those 30 million garments could be produced in China, so the opportunity cost of measuring them by computer would be much lower than in the United States. This is because Chinese workers are less efficient at producing computers than in the United States. This means that China will produce fewer computers than the United States for the same amount of labor, say, only 180,000 units.

The difference in opportunity cost provides a possibility of mutual benefit. The U.S. uses the labor force that produces 30 million outfits to produce computers, while China uses the labor that produces computers to produce Christmas clothes. In this way, the number of clothes produced in the world has not changed, but the number of computers has increased by 20,000. This reorganization of production will expand the size of the world economy as a whole.

It can be seen from this that China has a comparative advantage in the production of clothing, and the United States has a comparative advantage in the production of computers. Trade between both countries can benefit both countries if they export goods in which they have a comparative advantage.

Speaking of comparative advantage, we cannot fail to mention a concept corresponding to it, absolute advantage. If the United States produces clothing twice as efficiently as China, then the United States has an absolute advantage in producing clothing. The United States produces computers five times more efficiently than China, so the United States also has an absolute advantage in the production of aircraft. So why is it said that China has a comparative advantage in the production of clothing, while the United States has a comparative advantage in the production of computers? Because although the United States has an absolute advantage over China in clothing production, it has an even greater absolute advantage in computer production. Therefore, the Sino-US trade will be China's export of clothing to the United States, and the United States will export computers to China. The trade relationship between the two countries is based on comparative advantage rather than absolute advantage.

It is the differences in the appropriation, distribution and use of resources by countries that create comparative advantages. Differences in comparative advantage lead directly to the specialization of goods produced (the so-called "social division of labour") and the emergence of trade. The consequence of this specialization is that when everyone is able to specialize in what he or she does best, production becomes more efficient, and the total amount of material wealth that society as a whole can create and its overall economic well-being increases. The increase in total output brought about by specialization is the benefit of trade. Then, trade arises naturally.