Being a populous country, China will exert a significant impact on international
markets with its labour-intensive goods. If measured by absolute quantity
(amount of labour), no country in the world can rival China. As advocated by
the Heckscher-Ohlim-Vanek (HOy) Theorem, countries tend to export goods
that are intensive in the factor with which they are abundantly supplied.
Constrained by the availability of data on natural resources and physical capital,
we are only able to examine human capital stock, although the former features
in China's exports.! Similar to other developing countries, China has experienced
the natural-resource exporting stage for a long period. Only after economic
reform did China begin to leap the ladder of labour-intensive exports, with
which many other developing countries are still struggling. Nevertheless, does
China really export its abundance as suggested by the size of its population?
What implications can be induced from the HOV Theorem? We endeavour to
answer these questions empirically.