Question
In shipbuilding there are two types of ships. Producing basic bulk-carrying ships is labor intensive. Production of complex ships, including the largest container ships and
In shipbuilding there are two types of ships. Producing basic bulk-carrying ships is labor intensive. Production of complex ships, including the largest container ships and very deepwater oil-drilling ships, depends more on technical skills and design capabilities. Both China and South Korea have large shipbuilding industries. China's factor endowments are shown inFigure 5.3, of our textbok and comparable data for South Korea, reading across the columns, are 1.8%, 2.6%, 0.7%, 0.1%, 0.1%, 0.0%, and 0.2%. If China exports mostly basic bulk-carrying ships and South Korea exports mostly complex ships, is this pattern consistent with the Heckscher-Ohlin theory? How would changes in the long run, or coming from new techology adaption is one of the two or both sectors ( basic bulk carrying and more complex ships), or new environmental requirements, might effect your given endowment analysis of the two countries ( China and South Korea) ?
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