What is China’s comparative advantage?

This chapter seeks to identify China’s comparative advantages for national development in the contested processes of economic globalization. Through a critique of the widely assumed correlation between cheap labour and desirable foreign trade, and further between export and growth, growth and development, development and social benefits, it questions a prevailing neoliberal doctrine. The discussion shows how in our times certain classical insight has been turned into not only a flawed dogma that obscures strategic options for the developing countries, but also a political weapon against their workers, and indeed workers everywhere. Moreover, in China as elsewhere, the (potential) comparative advantage of cheap labour in trade may endure only at the cost of persistent low labour productivity and an ever weak national economy. As such the concepts of cheap labour and of development are essentially in contradiction. The argument is thus a rejection of current strategic thinking based on cheap labour, drawing attention instead to state capacity and social power for rational and democratic control of resources.