The comparative advantage of Chinese manufactured exports, Hao Wei, Zhao Chunming, Journal of Chinese Economic and Foreign Trade Studies, Vol. 5 Iss: 2, pp.107 – 126
Purpose – Considerable research has been conducted on the comparative advantage of Chinese manufactured exports before 2000, but too little attention has been focused on the twenty-first century. With this rapid growth of China’s export volume since 2001, what is the change in comparative advantage? Have qualitative changes taken place? The purpose of this paper is to conduct a thorough analysis of the comparative advantage of Chinese manufactures from 2002 to 2009, not only within the world market but also in the US market.
Design/methodology/approach – The research is based on 144 manufactures’ comparative advantage in the US and world market, displaying the distribution and variation range for the comparative advantage of Chinese manufactures at different technological levels in the 2002-2009 period with the RCA Index. This paper classifies 144 kinds of manufactures (on Standard International Trade Classification, Rev. 3 data) by technology level into five general groups and nine small groups, which cover the majority of Chinese manufactured exports.
Findings – First, the authors found that types of Chinese manufactured products with comparative advantage in both world and US markets are increasing. Most of the products with comparative advantage are low technology (LT) products. Second, in the world market, the comparative advantage of Chinese medium technology (MT) products has largely improved, but their RCA indexes are low and their kinds of products with very high comparative advantage are small. Third, as a whole, Chinese manufactured exports are of greater comparative advantage in the world market than in the US market. Specifically, LT products have the same position in world and US markets, while MT products and high technology (HT) products obviously have a greater comparative advantage in the world market.
Originality/value – First, little research has been conducted on the comparative advantage of Chinese manufactured exports since 2001. This paper undertakes a thorough analysis of the comparative advantage of Chinese manufactures from 2002 to 2009, not only within the world market but also in the US market. Second, it is very important for China to stabilize the overseas market demand and secure exports, this paper shows how China could cope with a crisis.