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Why Is China So Competitive? Measuring and Explaining China’s Competitiveness

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Author Info

  • F. Gerard Adams

    (Department of Economics, Northeastern University)

  • Byron Gangnes

    ()
    (Department of Economics, University of Hawaii at Manoa)

  • Yochanan Shachmurove

    (City University of New York)

Abstract

This paper evaluates factors responsible for the competitiveness of China in the world economy and relative to its East Asian rivals. China has been highly successful in capturing world export markets. Chinese competitiveness is not just a matter of an undervalued exchange and extremely low labor costs. It reflects primarily the coincidence of favorable cost conditions with improvements in China’s ability to produce products that meet world market specifications. These improvements are closely related to foreign participation in China’s economy through foreign direct investment and joint venture enterprises.

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File URL: http://www.economics.hawaii.edu/research/workingpapers/WP_04-6.pdf
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Bibliographic Info

Paper provided by University of Hawaii at Manoa, Department of Economics in its series Working Papers with number 200406.

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Length: 33 pages
Date of creation: Mar 2004
Date of revision:
Handle: RePEc:hai:wpaper:200406

Note: Also Singapore Management University Economics and Statistics Working Paper 07-2004, March 2004
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Keywords: China exports; comparative advantage; competitiveness; purchasing power parity; exchange rate; undervaluation; international comparisons; foreign direct investment; joint ventures;

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References

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  1. Balassa, Bela, 1979. "The Changing Pattern of Comparative Advantage in Manufactured Goods," The Review of Economics and Statistics, MIT Press, vol. 61(2), pages 259-66, May.
  2. Wu, Harry X., 2001. "China's comparative labour productivity performance in manufacturing, 1952-1997: Catching up or falling behind?," China Economic Review, Elsevier, vol. 12(2-3), pages 162-189.
  3. Heston, Alan & Summers, Robert, 1996. "International Price and Quantity Comparisons: Potentials and Pitfalls," American Economic Review, American Economic Association, vol. 86(2), pages 20-24, May.
  4. R. Dornbusch & S. Fischer & P. A. Samuelson, 1976. "Comparative Advantage, Trade and Payments in a Ricardian Model With a Continuum of Goods," Working papers 178, Massachusetts Institute of Technology (MIT), Department of Economics.
  5. Summers, Robert & Heston, Alan, 1991. "The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950-1988," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 327-68, May.
  6. Szirmai, Adam & Ruoen, Ren, 2000. "Comparative performance in Chinese manufacturing, 1980-1992," China Economic Review, Elsevier, vol. 11(1), pages 16-53.
  7. Ronald W. Jones, 2000. "Globalization and the Theory of Input Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 026210086x, December.
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Citations

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Cited by:
  1. Yaya Sissoko & David Yerger, 2010. "West Africa’s Evolving Competitive Exposure in U.S. Import Markets," International Advances in Economic Research, Springer, vol. 16(1), pages 11-23, February.
  2. Naude, Wim & Rossouw, Stephanie, 2009. "Early International Entrepreneurship in China: Extent and Determinants," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  3. José De Sousa & Sandra Poncet, 2007. "How are Wages set in Beijing?," Working Papers 2007-13, CEPII research center.
  4. Yochanan Shachmurove & Uriel Spiegel, 2009. "Ricardo Meets China, India and U.S. Three Hundred Years Later," PIER Working Paper Archive 09-015, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  5. Resmini, Laura, 2006. "Theoretical and Methodological Study on Comparative Advantages in Dynamic Growth Regions, Convergence and Inequalities Patterns," Papers DYNREG03, Economic and Social Research Institute (ESRI).
  6. Ahmed, Saira & Ahmed, Vaqar & Sohail, Safdar, 2010. "Trade agreements between developing countries: a case study of Pakistan - Sri Lanka free trade agreement," MPRA Paper 29209, University Library of Munich, Germany.
  7. Zhang, Abraham & Luo, Hao & Huang, George Q., 2013. "A bi-objective model for supply chain design of dispersed manufacturing in China," International Journal of Production Economics, Elsevier, vol. 146(1), pages 48-58.
  8. Cruz, Moritz, 2008. "Can Free Trade Guarantee Gains from Trade?," Working Paper Series RP2008/97, World Institute for Development Economic Research (UNU-WIDER).
  9. Yochanan Shachmurove & Uriel Spiegel, 2006. "Technological Improvements and Comparative Advantage Reconsidered," PIER Working Paper Archive 06-023, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  10. Henri de Groot & Jessie Bakens, 2007. "Globalisation and the Dutch economy; a case study to the influence of the emergence of China and Eastern Europe on Dutch international trade," CPB Discussion Paper 89, CPB Netherlands Bureau for Economic Policy Analysis.
  11. Brendan Coates & Dougal Horton & Lachlan McNamee, 2012. "China: prospects for export-driven growth," Economic Roundup, Treasury, Australian Government, issue 4, pages 79-102, December.
  12. Wim Naudé, 2009. "“Rushing in where angels fear to tread”?: The early internationalization of indigenous Chinese firms," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing, vol. 2(3), pages 163-177, October.
  13. Chit, Myint Moe & Rizov, Marian & Willenbockel, Dirk, 2008. "Exchange Rate Volatility and Exports: New Empirical Evidence from the Emerging East Asian Economies," MPRA Paper 9014, University Library of Munich, Germany.
  14. Bustillo Mesanza, Ricardo & Maiza Larrarte, José Antonio, . "EAEren eta Txinaren arteko harreman ekonomikoak: aukerak eta erronkak," Revista de Dirección y Administración de Empresas, Universidad del País Vasco - Escuela Universitaria de Estudios Empresariales de San Sebastián.
  15. Ari Van Assche & Chang Hong & Veerle Slootmaekers, 2008. "China's International Competitiveness: Reassessing the Evidence," LICOS Discussion Papers 20508, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  16. Hae-du Hwang & Xiangshuo Yin, 2008. "Recent developments on RTAs in North East Asia," Asia Europe Journal, Springer, vol. 6(3), pages 455-466, November.
  17. Dilip Das, 2008. "Repositioning the Chinese economy on the global economic stage," International Review of Economics, Springer, vol. 55(4), pages 401-417, December.

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