Ricardian Theorem Reality; Assessment of Sino-Tanzania Trade 2015-2019

Abstract

China has suited a noteworthy economic partner position in African countries, specifically Tanzania. Consequently, this research is aiming at determining the reality of the Ricardian theorem of comparative advantage by assessing its applicability to 21st Century International trade practice particularly the Sino-Tanzania bilateral trade from 2015 to 2019. To find out if Sino-Tanzania bilateral trade resembles the Ricardian theorem, the classical Balassa index (RCA), import and export intensity indexes were used to establish the revealed comparative advantage by-products between Tanzania and China in their bilateral trade. With the aid of International trade data obtained by the United National conference of Trade and Development (UNCTAD), (World Trade Organization) WTO and the Observatory of Economic Complexity (O.E.C.). The Balassa index, as well as import and export indexes, carried out some statistical tests grounding on both export and import merchandise trade (Standard International Trade Classification (SITC), Revision 3) related products; the study results established confirm the comparative advantage theory application in 21st Century reality particularly in Sino-Tanzania bilateral trade in the timeline of 2015-2019 import-export trade.