underscored

@underscored

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Even if one country is better at making everything, it doesn't have a comparative advantage in everything. That's impossible. Every country has a comparative advantage at something! That's why in the theory of comparative advantage, trade is balanced. In the real world, China's massive trade surplus means that trade is not balanced; much of the time, China isn't trading goods for other goods, it's trading goods for IOUs.

Noah Smith
1d ago

Multinationals have learned the painful lesson that when they put their factories in China, their technology will be appropriated by Chinese indigenous companies — often with the help of the Chinese government — and then later used to outcompete them in global markets.

3w ago

Underscored — save the words that stop you in your tracks.

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