IDEAS home Printed from https://ideas.repec.org/p/rif/dpaper/1173.html
   My bibliography  Save this paper

Cost Competitiveness of Chinese and Finnish Paper and Paper Product Manufacturing

Author

Listed:
  • Ahveninen, Harri
  • Suni, Paavo
  • Zhao, Yanyun
  • Wu, Yilin

Abstract

This study focuses on the labour cost competitiveness of the paper and pulp industry in China and Finland in particular, using the corresponding German, the US and Estonian industries as a point of comparison in the early 2000s. This study deepens the analysis of the earlier study of the cost competitiveness of the manufacturing industries in the same group of countries. Separate studies focusing on the labour cost competitiveness are carried out in a parallel manner on the chemical industries and metal industries. The results of these three sector studies deepen the knowledge about the change of competitiveness and its level. Large unit labour cost differences in a common currency were obviously a key factor behind exceptionally rapidly changing international production and trade structures in the late 1990s and early 2000s. The Chinese paper and pulp industry grew by about a quarter per year in 2000-2007 as the average annual growth of the value added of world manufacturing volume was only 3 per cent in 2000-2006. Nominal wages as such do not imply good international competitiveness. Chinese wages are, however, low even if their low labour productivity is taken into account and costs per unit of production are compared in a common currency. The relative levels of the Chinese unit labour costs vis-à-vis Germany, using the unit value ratios (UVR) to make the production volumes comparable, were estimated to be about 9 per cent in the paper and pulp industry. The ratio has even declined in the early 2000s and has stayed relatively stable after that until 2007. Improving labour productivity in China had compensated for the effects of rapidly rising wages and an appreciating Renminbi. The outlook of the paper and pulp industry, like the economy in general, is clouded by the difficult global financial crisis, which strongly restricts export possibilities and dampens also the domestic markets of industry. On the other hand, the stimulus packages of the government support the demand for paper and pulp products.

Suggested Citation

  • Ahveninen, Harri & Suni, Paavo & Zhao, Yanyun & Wu, Yilin, 2008. "Cost Competitiveness of Chinese and Finnish Paper and Paper Product Manufacturing," Discussion Papers 1173, The Research Institute of the Finnish Economy.
  • Handle: RePEc:rif:dpaper:1173
    as

    Download full text from publisher

    File URL: http://www.etla.fi/wp-content/uploads/2012/09/dp1173.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gregory Chow, 2006. "Are Chinese Official Statistics Reliable?," CESifo Economic Studies, CESifo Group, vol. 52(2), pages 396-414, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sinclair, Tara M., 2019. "Characteristics and implications of Chinese macroeconomic data revisions," International Journal of Forecasting, Elsevier, vol. 35(3), pages 1108-1117.
    2. Li, Enjing & Suni, Paavo & Zhao, Yanyun, 2008. "Cost Competitiveness of Chinese and Finnish Chemical Industries," Discussion Papers 1171, The Research Institute of the Finnish Economy.
    3. Herrerias, M.J. & Orts, Vicente, 2013. "Capital goods imports and long-run growth: Is the Chinese experience relevant to developing countries?," Journal of Policy Modeling, Elsevier, vol. 35(5), pages 781-797.
    4. He, Xi, 2023. "Dams, cropland productivity, and economic development in China," China Economic Review, Elsevier, vol. 81(C).
    5. Marco G. Ercolani & Zheng Wei, 2010. "An Empirical Analysis of the Lewis-Ranis-FEi Theory of Dualistic Economic Development for China," Discussion Papers 10-06, Department of Economics, University of Birmingham.
    6. John Gibson & Chao Li, 2017. "The Erroneous Use Of China'S Population And Per Capita Data: A Structured Review And Critical Test," Journal of Economic Surveys, Wiley Blackwell, vol. 31(4), pages 905-922, September.
    7. Shuaizhang Feng & Yingyao Hu & Robert Moffitt, 2015. "Long Run Trends in Unemployment and Labor Force Participation in China," NBER Working Papers 21460, National Bureau of Economic Research, Inc.
    8. Hao, Yu & Zhang, Zong-Yong & Liao, Hua & Wei, Yi-Ming, 2015. "China’s farewell to coal: A forecast of coal consumption through 2020," Energy Policy, Elsevier, vol. 86(C), pages 444-455.
    9. Herrerias, M.J. & Ordoñez, J., 2012. "New evidence on the role of regional clusters and convergence in China (1952–2008)," China Economic Review, Elsevier, vol. 23(4), pages 1120-1133.
    10. repec:pri:cepsud:194chow is not listed on IDEAS
    11. Zhen Yang & Weijun Gao & Jiawei Li, 2022. "Can Economic Growth and Environmental Protection Achieve a “Win–Win” Situation? Empirical Evidence from China," IJERPH, MDPI, vol. 19(16), pages 1-21, August.
    12. Numan Ülkü & Kexing Wu, 2023. "Stock Market's Response to Real Output Shocks in China: A VARwAL Estimation," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(5), pages 1-25, September.
    13. Paul Minard, 2020. "Institutions and China's comparative development," Papers 2001.02804, arXiv.org.
    14. JunQiang Liu & Tao Chen, 2013. "Sleeping money: investigating the huge surpluses of social health insurance in China," International Journal of Health Economics and Management, Springer, vol. 13(3), pages 319-331, December.
    15. Vishal Chandr Jaunky and Lin Zhang, 2016. "Convergence of Operational Efficiency in Chinas Provincial Power Sectors," The Energy Journal, International Association for Energy Economics, vol. 0(China Spe).
    16. Tara Sinclair & Yeuqing Jia, 2010. "Permanent and Transitory Macroeconomic Relationships between China and the Developed World," Working Papers 2010-08, The George Washington University, Institute for International Economic Policy.
    17. Chamon, Marcos & de Carvalho Filho, Irineu, 2014. "Consumption based estimates of urban Chinese growth," China Economic Review, Elsevier, vol. 29(C), pages 126-137.
    18. Huang, Yasheng & Niu, Zhiyong & Yang, Clair, 2020. "Testing firm-level data quality in China against Benford’s Law," Economics Letters, Elsevier, vol. 192(C).
    19. Baum, Christopher F. & Kurov, Alexander & Wolfe, Marketa Halova, 2015. "What do Chinese macro announcements tell us about the world economy?," Journal of International Money and Finance, Elsevier, vol. 59(C), pages 100-122.
    20. Greaney, Theresa M. & Li, Yao, 2017. "Multinational enterprises and regional inequality in China," Journal of Asian Economics, Elsevier, vol. 48(C), pages 120-133.
    21. Yating Dai & Jian Cheng & Daolin Zhu, 2022. "Understanding the Impact of Land Supply Structure on Low Consumption: Empirical Evidence from China," Land, MDPI, vol. 11(4), pages 1-18, April.

    More about this item

    Keywords

    competitiveness; unit value ratio; paper&pulp industry; NACE 21;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rif:dpaper:1173. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kaija Hyvönen-Rajecki (email available below). General contact details of provider: https://edirc.repec.org/data/etlaafi.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.