Theoretical Reviews of International Trade: Malaysia and China Exporting Goods in Asia

Abstract

International business is explained by many international trade theories. In this study, four important theories (i.e. Adam Smith’s Absolute Advantage Theory, Steffan Linder’s country similarity theory, Dunning’s Eclectic Theory and New Trade Theory) are applied on Malaysia and China on their exporting activities in Asian market to explain trends in business adequately. Malaysia is well-known as the world’s largest electrical and electronic exporters while China is the top hub for manufacturing exporting. Both countries are playing significant role in Asia trading activities. They are also contributing to the world economic through their exporting.