The Policy Choice of Chinese Mineral Resource Industry from the Dynamic Comparative Advantage

The developing countries produce and export mineral products with comparative advantages according to David Ricardo's theory of comparative advantage; however, they did not realize the conditions of sustainable development on the economy or welfare. It shows the deficit of the static comparative advantage theory. By means of modification on the theory, the dynamic comparative advantage model can be constructed. It can analyze trade welfare under the free trade condition, with the conclusion of the necessary and sufficient conditions that free trade causes a decrease in welfare. At last, the policy proposals on the development and exploit of our mineral sources are brought forward from the dynamic comparative advantage point of view.