Thailand produces rubber at a lower opportunity cost than China. It does, however, import some rubber from China.
What could explain Thailand importing rubber from China?
1 )
China imposes lower tariffs on rubber imports than Thailand.
2 )
China is consuming increasing quantities of rubber in industry.
3 )
Thailand has the absolute but not the comparative advantage in rubber production.
Thailand wants to avoid the risks involved in overspecialising in rubber production.
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