How the Dragon Captured the World Export Markets: Outsourcing and Foreign Investment Lead the Way
AbstractThis paper explores several theories regarding how China has become highly successful in capturing world export markets. The paper concludes that increased competitiveness is dependant on, but not limited to several factors discussed in detail including, exchange rate undervaluation, low wage rates and excess labor resources. Direct foreign investment which enabled China to produce products that meet world market specifications, brought new technology and foreign management, played a key factor. Reasons for China’s advantage over other East Asian countries are explored. The merits and methods of various measures of China’s competitiveness and comparative competitiveness are also discussed.
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Bibliographic InfoPaper provided by Penn Institute for Economic Research, Department of Economics, University of Pennsylvania in its series PIER Working Paper Archive with number 04-042.
Length: 44 pages
Date of creation: 03 Dec 2004
Date of revision:
China exports; comparative advantage; competitiveness; purchasing power parity; exchange rate; undervaluation; devaluation; international comparisons; foreign direct investment; technology;
Find related papers by JEL classification:
- F0 - International Economics - - General
- F1 - International Economics - - Trade
- P0 - Economic Systems - - General
- R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
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- John Fernald & Hali Edison & Prakash Loungani, 1998. "Was China the first domino? assessing links between China and the rest of emerging Asia," International Finance Discussion Papers 604, Board of Governors of the Federal Reserve System (U.S.).
- Wim Suyker & Henri de Groot, 2006. "China and the Dutch economy," CPB Document 127, CPB Netherlands Bureau for Economic Policy Analysis.
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