Technology

To fully measure Comparitive Advantages, you must include the differences in manpower costs, which brings us back to salaries (plus, since this is to compare manpower costs, you also need things like the employer-side tax costs such as social security payments), which then needs to be converted to a single currency using cross-currency exchange rates.

Further, every single monetary elements of calculating Comparitive Advantage which is in local currencies needs to go through those cross-currency exchange rates in order to be comparable.

There is no way you can calculate comparative advantage merelly with the single datapoint which is a cross-currency exchange rate because all that tells you is the relation between two units of measurement and says nothing about the actual quantities being measured.

As I said, this is incredibly basic financial stuff.

To give you a really basic non-financial example which hopefully will make you understand it:

• Two farms produce milk, one in Britain and the other in The Netherlands. The farm in Britain measures milk by the pint. The one in The Netherlands measures milk by the liter.

What you wrote in your original post is equivalent to saying that "The farm in Britain produces more milk because 1 pint = 1.759754 liters".

You don't know anything about how many pints the British farm produces, or about how many liters the Dutch farm produces, yet you claimed the ratio between two measurement units is enough by let you draw conclusions about production numbers even though you used no prodution numbers.

If I was to bet I would say you've read some articles about how the exchange rate of the Yuan vs USD is kept artificially low to increase the competiviness of Chinese exports, didn't quite understand how it works and still thought you knew enough and applied it were it wasn't applicable and/or in the wrong way.