What Is China's Comparative Advantage?

This paper seeks to identify China's comparative advantages for national development in the contested processes of economic globalization. Through a critical discussion of the popularly assumed, definitive correlation between cheap labor and foreign trade, and further between export and growth, it questions a prevailing neoliberal doctrine. The paper shows how a 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 workers. Yet in China as elsewhere, the (potential) comparative advantage of cheap labor may endure only at the cost of labor productivity being kept low and national economy weak. As such, the concepts of development and of advantageous cheap labor are ultimately in contradiction. The argument thus draws attention instead to state capacity and social power over rational and democratic control of resources.