Essay: Imports from China and India

Sample Essay

With cheap imports from China and India out of the way, local businesses could expand and grow considerably. However, for businesses such as Pacific Brands that are moving overseas, it may present significant problems. Their goods exported to the Australian market may now become relatively expensive which may be disadvantageous to them (Krugman 1987). They could then explore further avenues in other markets around the world.

However, if the move by Australia leads to other countries putting up trade barriers as well, it may lead to big trouble for the company which may have to consider moving its facilities back into Australia. The Heckscher-Ohlin theorem could be crucial to analyzing both the articles (Blaug 1992). As the trend taken by Pacific Brands shows, companies such as those in the clothing sector that are more labor intensive are choosing to move their facilities to more labor intensive areas with cheap labor such as China. This is in line with a general move of labor-intensive manufacturing towards Asia (Atkinson 1969).

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