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Competitiveness of China's Manufacturing Industry and its Impacts on the Neighbouring Countries


  • Wei Zhang
  • Tao Zhang


This paper investigates the rapid growth of China's share in the international commodity market and the structural changes of China's commodity exports. It demonstrates a significant improvement of international competitiveness in China's manufacturing sector. The panel data analysis, based on a Solow-Swan type growth model on China's 37 manufacturing industries from 1991 to 2002, reveals that the main sources of the strengthened competitiveness of China's manufacturing sector have been mainly from Total Factor Productivity (TFP), while labour productivity has been increasing and capital productivity has been falling. A preliminary empirical analysis on the impacts of China's increasing competitiveness finds that there are negative correlations between China and most of its neighbouring countries, both newly industrialised economies and other Southeast Asian developing economies. However, there is no evidence of negative impacts of China's increasing competitiveness on developed countries such as the United States and Japan.

Suggested Citation

  • Wei Zhang & Tao Zhang, 2005. "Competitiveness of China's Manufacturing Industry and its Impacts on the Neighbouring Countries," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 3(3), pages 205-229.
  • Handle: RePEc:taf:jocebs:v:3:y:2005:i:3:p:205-229
    DOI: 10.1080/14765280500317940

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    References listed on IDEAS

    1. World Bank, 2003. "World Development Indicators 2003," World Bank Publications, The World Bank, number 13920.
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    Cited by:

    1. Faria, João Ricardo & Mollick, André Varella & Albuquerque, Pedro H. & León-Ledesma, Miguel A., 2009. "The effect of oil price on China's exports," China Economic Review, Elsevier, vol. 20(4), pages 793-805, December.
    2. Maria Socorro Gochoco-Bautista & Raul V. Fabella, 2006. "What Type of Monetary and Exchange Rate Cooperation do China’s Asian Neighbors Want from China?," UP School of Economics Discussion Papers 200604, University of the Philippines School of Economics.


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