CLICK HERE - DOWNLOAD CHINA PRICE REPORT
The China Price Project provides the first comprehensive analysis of each of the eight major drivers of
the competitive advantage of Chinese manufacturers. The results are startling and should be useful
to business executives, policy makers, labor leaders, consumers, and anyone concerned about the loss of U.S. manufacturing
jobs to China.
Abstract of China Price Project Report
manufacturers have the capability to significantly undercut prices offered by foreign competitors over a wide range of products. Today, as a result of the “China Price,” China
has captured over 70% of the world’s market share for DVDs and toys, more than half for bikes, cameras, shoes, and telephones;
and more than a third for air conditioners, color TVs, computer monitors, luggage, and microwave ovens. It also has established dominant market positions in everything from furniture, refrigerators and washing
machines to jeans and underwear.
report examines the eight major economic drivers of the China Price and provides estimates of their relative contributions
to China’s manufacturing competitive
advantage. Lower labor costs account
for 39% of the China Price advantage. A highly efficient form of production known
as “industrial network clustering” together with catalytic Foreign Direct Investment add another 16% and 3%, respectively. The remainder of the China Price advantage is driven by more mercantilist elements. Export subsides account for 17% of the advantage, an undervalued currency adds 11%,
counterfeiting and piracy contribute 9%, and together, lax environmental and worker health and safety regulatory regimes add
another 5%. Implications for management strategy and public policy are noted within the context of the “flight or fight”
choice facing manufacturing enterprises seeking to compete with China.