Chinese exports of toys and footwear can be explained by factor endowments,while Chinese exports of telecommunications equipment and computers and accessories can be explained by product-cycle analysis.

Question

Quizplus · Accepted Answer

Factor endowments refer to the availability of resources in a particular country, such as cheap labor and natural resources, which make the production of certain goods more efficient and cost-effective. China has a comparative advantage in the manufacturing of toys and footwear due to its abundant supply of low-cost labor. On the other hand, product-cycle analysis accounts for the stages of a product's life cycle, from innovation to maturity, and how a country's comparative advantage may change as the product progresses through these stages. China's relatively advanced technology and skilled workforce enable it to produce and export telecommunications equipment and computers and accessories.

Chinese Exports of Toys and Footwear Can Be Explained by Factor