IDEAS home Printed from https://ideas.repec.org/p/ind/icrier/228.html
   My bibliography  Save this paper

The Cost Competitiveness of Manufacturing in China and India: An Industry and Regional Perspective

Author

Listed:
  • Bart Van Ark

    (Indian Council for Research on International Economic Rela)

  • Abdul Azeez

    (Indian Council for Research on International Economic Rela)

  • Erumban Vivian Chen

    (Indian Council for Research on International Economic Rela)

  • Chen Utsav Kumar

    (Indian Council for Research on International Economic Rela)

Abstract

This paper focuses on comparisons of productivity, (unit) labor cost and industry-level competitiveness for the manufacturing sector of China and India. We first provide a comparison between India and China using a broad international perspective. We find that China has increased its labor productivity to a level above that of India, but due to a somewhat higher compensation level, China is still somewhat at a disadvantage in terms of unit labor cost in manufacturing relative to India. In the second half of the paper, we make an analysis of industry level differences in productivity, labor compensation and unit labor costs at state and province level in the two countries from the mid 1990s to the early 2000s. We find rapid declines in unit labor cost across industries and provinces in China, but increases in many instances in India. This suggest that productivity and compensation growth have become much more aligned across regions in China whereas this is not (yet) the case in India. We relate these results to differences in the implementation of market reforms between the two countries and removal of barriers to resource mobility eradicating inefficient manufacturing activity

Suggested Citation

  • Bart Van Ark & Abdul Azeez & Erumban Vivian Chen & Chen Utsav Kumar, "undated". "The Cost Competitiveness of Manufacturing in China and India: An Industry and Regional Perspective," Indian Council for Research on International Economic Relations, New Delhi Working Papers 228, Indian Council for Research on International Economic Relations, New Delhi, India.
  • Handle: RePEc:ind:icrier:228
    as

    Download full text from publisher

    File URL: http://www.icrier.org/publication/Working_Paper_228.pdf
    Download Restriction: no

    More about this item

    Keywords

    O14; J24;

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

    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:ind:icrier:228. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (G.K. Manjunath). General contact details of provider: http://edirc.repec.org/data/icriein.html .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.