Cost Competitiveness Comparisons and Convergence in China
This paper examines provincial disparities and convergence of sectors in China from a labour cost perspective. We find that the provinces in the Northeast and Coastal regions have strong advantages in the manufacturing sector, while the Primary sector, Construction and Real estate sectors have better cost competitiveness in the Interior and West regions. The decrease of relative unit labour cost (RULC) is mainly due to the faster growth rates of relative labour productivity (RLP) than the growth rate of relative nominal labour costs (RNLC) in most cases. A decomposition analysis shows that there are much more cost competitiveness gains, as well as relative decrease of nominal labour costs and labour productivity improvement during the period 1978-1995 than the years afterwards. We find the fast convergence of RULC is consistent with the fast converging RLP among provinces with static wages, suggesting the importance of institutional factors such as rigid wage setting in Chinese labour markets.
|Date of creation:||05 Nov 2012|
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- Fleisher, Belton & Li, Haizheng & Zhao, Min Qiang, 2010.
"Human capital, economic growth, and regional inequality in China,"
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- Belton Fleisher & Haizheng Li & Min Qiang Zhao, 2007. "Human Capital, Economic Growth, and Regional Inequality in China," William Davidson Institute Working Papers Series wp857, William Davidson Institute at the University of Michigan.
- Fleisher, Belton M. & Li, Haizheng & Zhao, Min Qiang, 2008. "Human Capital, Economic Growth, and Regional Inequality in China," IZA Discussion Papers 3576, Institute for the Study of Labor (IZA).
- Fleisher, Belton M. & Li, Haizheng & Zhao, Min Qiang, 2007. "Human Capital, Economic Growth, and Regional Inequality in China," IZA Discussion Papers 2703, Institute for the Study of Labor (IZA).
- Belton Fleisher & Haizheng Li & Min-Qiang Zhao, 2009. "Human Capital, Economic Growth, and Regional Inequality in China," Working Papers 09-01, Ohio State University, Department of Economics.
- repec:dgr:rugggd:200580 is not listed on IDEAS
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- Ark, Bart van & Stuivenwold, Edwin & Ypma, Gerard, 2005. "Unit labour costs, productivity and international competitiveness," GGDC Research Memorandum 200580, Groningen Growth and Development Centre, University of Groningen.
- Vivian W. Chen & Harry X. Wu & Bart van Ark, 2009. "More Costly Or More Productive? Measuring Changes In Competitiveness In Manufacturing Across Regions In China," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(s1), pages 514-537, 07.
- van Ark, Bart, 1998. "Productivity," Journal of the Japanese and International Economies, Elsevier, vol. 12(2), pages 171-174, June. Full references (including those not matched with items on IDEAS)
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