Concept of comparative advantage between two countries


Question: International trade:

a) Explain the concept of comparative advantage between two countries (use a numerical example to illustrate, and do not use the identical example in the lecture note).

b) Explain the advantages of free trade.

c) What are the potential problems (disadvantages) associated with free trade?

Question: Explain why many Asian countries set up Export Processing Zones and why China set up Special Economic Zones. What are the similarities and differences between EPZs and SEZs?

Question: FDI:

a) How do you define foreign direct investment (FDI)? Explain this concept.

b) What are the typical motives for FDI from the perspectives of the host countries and MNCs respectively? Please discuss.

c) What are typical modes (organizational forms) of FDI in China and what are their advantages and disadvantages? Explain.

Question: Explain to what extent trade and FDI can promote economic growth (generally as well as specifically in the context of China).

Question: Discuss speacial features of two companies Lenovo and Huawei and to what extent Lenovo and Huawei are a successful story of businesses in the context of the transitional Chinese economy.

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Macroeconomics: Concept of comparative advantage between two countries
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