China's exported products can offer relatively more employment opportunities than imported products.

On one hand, China has a large domestic market; on the other hand, China is facing increasing trade frictions. How should China deal with the relationship between the domestic market and international trade?

When an economy takes the "comparative advantage" strategy, it will base its development on fully tapping into the international market. As long as its products have comparative advantages, they will be competitive in both domestic and international markets.

Moreover, from the perspective of domestic demand, comparatively speaking, to develop the economy in accordance with comparative advantage, the domestic demand will also rise. If China takes the "catch-up" strategy, the wealthy will invest in the capital-intensive industries and these industries will provide relatively limited jobs, which makes it impossible for many poor people, who make money by working as laborers, to participate in the economy and enjoy the fruits of economic development. As we know, the rich are not much inclined to spend money, so when the wealth is controlled by a small number of rich people, the whole society will tend to spend little.

In line with the "comparative advantage" strategy, the Chinese economy will become very competitive, which will of course be very stable. In a stable economy, people tend to be more confident about future earnings and spend more. If we try to overtake other countries, the economic circle will change sharply. As a result, the government does not need to protect and subsidize enterprises that are trying to overtake others but can't survive by themselves. Instead, the government can put more public finance into social security, education and health.

Industries that rely on the advantage of labor costs and resources usually fall into the low-threshold category and thus will attract the attention of more businesses, regions and countries. Will China's comparative advantage decline or even disappear in this scenario?

Comparative advantages are felt through comparison. As long as there is the possibility of comparison, the advantage will remain indefinitely. For example, the labor force in Viet Nam is cheaper than that in China, and some are afraid that China's advantage of cheap labor force will be overshadowed by Viet Nam. The question is that since we have more capital than Viet Nam, should we still continue labor-intensive industries? If we continue to do so, we have to offer subsidies, but why do we subsidize enterprises that do not have comparative advantages?

The key now is how to further improve the market economy. As long as we have a well-developed market economy, market competition will drive enterprises to continue industrial and technological upgrading.

Against the backdrop of globalization, developed countries are always at the high-value-added end of the industrial chain, in the international labor division system, while the vast majority of developing countries are relegated to the low-value-added end. If all countries tend to manufacture products of comparative advantages, is it possible that while the original advantages will be continuously strengthened, developing countries will never catch up with developed countries?

From the perspective of comparative advantage, it's completely possible for developing countries to catch up with developed countries. The reasons are as follows: First, as developing countries have relatively limited capital, the return rate will rise and this will promote accumulation of capital. Second, after capital is accumulated, upgrading of the industrial structure is in urgent need. However, if they only depend on themselves for technological research and development, the chance of success is low. During the period of capital accumulation, if there is no technological progress or the progress is slow, capital return will slow down, together with capital accumulation. Developing countries, however, have opportunities to largely copy and import technologies from developed countries, with low cost in innovation. With rapid innovation, the capital return rate can remain at a relatively high level.

Given the above two points, in developing countries that follow the "comparative advantage" strategy, the upgrading of the factor endowment structure will be faster than it is in developed countries. After developing countries catch up with developed countries in terms of factor endowment structure, industries, technologies and income levels are likely to keep up with developed countries'.

China is paying more attention to independent innovation, what steps should be taken when dealing with technology imports and independent innovation?

If technology imports are possible, of course we should do it, as this will save more costs than if we do the research and development work by ourselves. Nevertheless, from the perspective of comparative advantage, innovation is still necessary.

For example, technologies imported from developed countries are often of high automation level, so they do not necessarily suit the situation in China and must be readjusted accordingly. To sum up, what makes China competitive is not a high technological level but low production cost.

Note: In economics, the theory of "comparative advantage" explains why it can be beneficial for two parties (countries, regions, individuals and so on) to trade if one has a lower relative cost of producing some goods. What matters is not the absolute cost of production but the opportunity cost, which measures how much production of one product is reduced to produce one more unit of another product. Comparative advantage is critical to understanding modern international trade theory. (Source: en.wikipedia.org)