ge17 - Case Study 2 Soybeans in China GEB 3373 Spring 2011...

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Case Study 2 Soybeans in China GEB 3373, Spring 2011 1
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GEB 3373, Spring 2011 2 Absolute or Comparative Advantage? China has a long history of soybean production and consumption, and it has excellent land for growing soybeans. China has fallen to the fourth largest producer of soybeans, after the United States, Brazil, and Argentina, because production costs are higher in China and the other countries offer more generous subsidies to soybean farmers. Clearly, China does not have an absolute advantage in the production of soybeans.
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GEB 3373, Spring 2011 3 What is the Current Problem with the Chinese Soybean Industry? The price for Chinese soybeans is higher than the price for imported soybeans. The quality of Chinese soybeans is lower than the quality of imported soybeans. Soybean processing facilities are increasingly owned by foreign companies who are mainly interested in making a profit, and thus are turning to imported soybeans.
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