I don't understand this
This passage is from 'The Economist'. I have to make notes on it, but I don't understand what it means. Please could you help?
"Many imports from China have moved up-market from easy-to-produce products, such as footwear, to more sophisticated goods, such as computers and electronics. As a result, to use economists' jargon, the “factor content” of American imports—in effect, the amount of skilled labour they contain—has not shifted downwards. Mr Katz says factor-based models suggest trade with poor countries explains only 5% of rising income inequality."
"Many imports from China have moved up-market from easy-to-produce products, such as footwear, to more sophisticated goods, such as computers and electronics. As a result, to use economists' jargon, the “factor content” of American imports—in effect, the amount of skilled labour they contain—has not shifted downwards. Mr Katz says factor-based models suggest trade with poor countries explains only 5% of rising income inequality."
I haven't done proper research into this, but it sounds like it is basically saying China is producing more complicated goods, which means the goods that America is importing are no longer cheap, mass manufactured goods (well, to an extent).
This would mean that China is becoming more of an American competitor (America could never succeed in outcompeting China in the production of cheap, mass manufactured goods) if it is beginning to produce more higher-quality, premium goods. If this were the case then China may start 'taking jobs' from America.
It seems that Mr Katz disagrees that jobs are being outsourced to China in sectors which America has a comparative advantage.
Perhaps if you post the link to the economist article I can be more specific.
This would mean that China is becoming more of an American competitor (America could never succeed in outcompeting China in the production of cheap, mass manufactured goods) if it is beginning to produce more higher-quality, premium goods. If this were the case then China may start 'taking jobs' from America.
It seems that Mr Katz disagrees that jobs are being outsourced to China in sectors which America has a comparative advantage.
Perhaps if you post the link to the economist article I can be more specific.
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