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Why Is China So Competitive? Measuring and Explaining China’s Competitiveness

Author

Listed:
  • F. Gerard Adams

    () (Northeastern University)

  • Byron Gangnes

    () (School of Economics and Social Sciences, Singapore Management University)

  • Yochanan Shachmurove

    () (City University of New York)

Abstract

This paper evaluates factors responsible for the competitiveness of China in the world economy and relative to its East Asian rivals. China has been highly successful in capturing world export markets. Chinese competitiveness is not just a matter of an undervalued exchange and extremely low labor costs. It reflects primarily the coincidence of favorable cost conditions with improvements in China’s ability to produce products that meet world market specifications. These improvements are closely related to foreign participation in China’s economy through foreign direct investment and joint venture enterprises.

Suggested Citation

  • F. Gerard Adams & Byron Gangnes & Yochanan Shachmurove, 2004. "Why Is China So Competitive? Measuring and Explaining China’s Competitiveness," Working Papers 07-2004, Singapore Management University, School of Economics.
  • Handle: RePEc:siu:wpaper:07-2004
    as

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    References listed on IDEAS

    as
    1. Wu, Harry X., 2001. "China's comparative labour productivity performance in manufacturing, 1952-1997: Catching up or falling behind?," China Economic Review, Elsevier, vol. 12(2-3), pages 162-189.
    2. Balassa, Bela, 1979. "The Changing Pattern of Comparative Advantage in Manufactured Goods," The Review of Economics and Statistics, MIT Press, vol. 61(2), pages 259-266, May.
    3. Heston, Alan & Summers, Robert, 1996. "International Price and Quantity Comparisons: Potentials and Pitfalls," American Economic Review, American Economic Association, vol. 86(2), pages 20-24, May.
    4. Szirmai, Adam & Ruoen, Ren, 2000. "Comparative performance in Chinese manufacturing, 1980-1992," China Economic Review, Elsevier, vol. 11(1), pages 16-53.
    5. Dornbusch, Rudiger & Fischer, Stanley & Samuelson, Paul A, 1977. "Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods," American Economic Review, American Economic Association, vol. 67(5), pages 823-839, December.
    6. Ronald W. Jones, 2000. "Globalization and the Theory of Input Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 026210086x, January.
    7. Raymond Vernon, 1966. "International Investment and International Trade in the Product Cycle," The Quarterly Journal of Economics, Oxford University Press, vol. 80(2), pages 190-207.
    8. Keld Laursen, 1998. "Revealed Comparative Advantage and the Alternatives as Measures of International Specialisation," DRUID Working Papers 98-30, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    9. Robert Summers & Alan Heston, 1991. "The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950–1988," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 327-368.
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    More about this item

    Keywords

    China exports; comparative advantage; competitiveness; purchasing power parity; exchange rate; undervaluation; international comparisons; foreign direct investment; joint ventures.;

    JEL classification:

    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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