上降克Social Coalition Theory irade SHANGHAI JIAO TONG UNIVERSITY Hecksher-Ohlin Theory "Each nation has a comparative advantage in the production of those goods that use intensively those factors that they possess in relative abundance." China Labor-Simple Manufacturing EX:Shoes US→Capital→High-Tech Manufacturing 强 EX:Computers So China should produce shoes to trade for American computers (and vice versa) 11, Social Coalition Theory in Trade Hecksher-Ohlin Theory “Each nation has a comparative advantage in the production of those goods that use intensively those factors that they possess in relative abundance.” China → Labor → Simple Manufacturing EX: Shoes US → Capital → High-Tech Manufacturing EX: Computers So China should produce shoes to trade for American computers (and vice versa)