a speech given by Pascal Lamy, Director-General of the World Trade Organization, on Sept

 Lamy's comments suggest that China has a comparative advantage in which sector(s)? The comments also suggest that China does NOT have a comparative advantage in which sector(s)? Explain your answers.According to Lamy's comments China especially have competitive advantages in the manufacturing sector due to its relative openness and, government's efforts to decrease tariffs. It is very clear that the government provides incentives for those who want to operate outside the borders. On the other hand the country does not have a comparative advantage in agriculture because it still cannot ensure adequate supply of food for its growing population. China also does not have competitive advantage in other sectors like banking, telecommunications, insurance, and transport services because they are still in the development process.B) Lamy's comments suggest that China is both an importer and an exporter of agricultural goods. Of the 5 models we've learned in class, which one(s) would support this existence of incomplete specialization? Which is (are) inconsistent with the incomplete specialization we observe in China?Heckscher-Ohlin-Samuelson Model supports the existence of incomplete specialization. Because according to this model production factors are mobile and these factor prices may equalize if countries are incompletely specialized. If at least one country is completely specialized no factor-price equalization obtains. Different countries differ in their individual discount rates and this creates a situation of incomplete specialization and different factor rewards. On the other hand Ricardian and Specific Factors Models does not support this existence because the factors of production are not mobile.