An Empirical Study About The International Competitivebess Of China’s Manufacturing Industry

The manufacturing industry is the cornerstone of the industrialized countries, which has a vital role in the development of a country’s economy. During the30years of reforming and opening up, the industrialization level of china has been considerable progressed, and the manufacturing sector plays an increasing importance part in the economy. As an important part of the global production, the development of China’s manufacturing industry has an increasing important influence on the development of the world economy."World factory"status has become increasingly prominent. At the same time, the competitive advantage that China relied on to participate in the international market and the competitive industries have been also changing. It shows as:the decline of China’s demographic dividend, foreign-funded enterprises’ leaving, the rapid development of high-tech industries and so on. Therefore, what we need to focus on is:in the context of the changing global production system, the current situation of the international competitiveness of China’s manufacturing industry, which manufacturing industry has the competitive advantage in the international market, factors that result in these industries competitive changes.Firstly, from the point of classical trade theory, Porter’s competitive advantage theory and industrial agglomeration theoretical, the article views the meaning and evolution of international competitiveness. Then by drawing on the latest research, we establish the evaluation index system of China’s manufacturing’s export competitiveness and trade patterns, including the revealed comparative advantage index, relative export performance index, the export similarity index and trade overlap index. Based on Sheng Bin (2008)classification of industrial products, we use the latest industrial SITC.3digit import and export data to evaluate the international competitiveness of five different types of manufacturing sectors in China. The analysis revealed that labor-intensive Manufacturing sector is the most internationally competitive industries, but the competitive advantages continue to decay. The high-tech sector shows the fastest growth in international competitiveness and has a good development prospects. This article uses the data of29industrial sectors in China to empirically analysis the factors that can affect the competitiveness of manufacturing industry in China. The study finds that FDI、labor costs and scale of the industry is the major factor affecting the international competitiveness of China’s manufacturing industry. Expansion of industrial scale and the inflow of FDI show a significant role in promoting China’s industrial competitiveness while the growing labor cost reduces the international competitiveness of the manufacturing sector. The positive effect of FDI is not obvious. Exchange rate and the competition inside the industry are not strong on the interpretation of the international competitiveness of China’s manufacturing industry, rendering a neutral impact. On this basis, the article also sub-sector empirical analysis to show the difference between different types of technology in the manufacturing sector and find that the inflow of foreign capital improves the competitiveness of the technology、labor-intensive manufacturing sectors, while reduces the primary manufacturing sector’s international competitiveness. Labor cost shows a significant negative influence on the international competitiveness of different types of industries. The expansion of industrial scale significantly promotes the international competitiveness of the four manufacturing sectors. The real exchange rate has a significant role in promoting the international competitiveness of labor-intensive manufacturing sector, but not significant for the interpretation of other manufacturing sectors. Similarly. intra-industry competition has a role in promoting the international competitiveness of high-tech manufacturing sector, but had no significant effect on labor-intensive manufacturing sector. Finally, based on the empirical regression results and from the perspectives of the state and enterprises, the article puts forward policy recommendations of how to improve the international competitiveness of China’s manufacturing industry.