China And German’s Export Competitiveness Of Electromechanical Products

Electromechanical products are the world’s major commodity in trade, the scope of which are very broad, ranging from labor-intensive products to capital and technology-intensive products, therefore they are of great significance for a country promoting employment and improving technological competitiveness, and that is why government and enterprises attach great importance around the world. China’s Electrical industry growing progressively after the reform and opening up, and its speed in recent years receives much concern. Especially in2009, China’s exports of electromechanical products exceeded German for the first time, which was the traditional electromechanical producer and major exporter, thus became the world’s largest exporter of electromechanical products. However, we cannot infer that China’s export competitiveness of electromechanical products surpasses German. In order to evaluate China’s export competitiveness of electromechanical products, this paper will be based on the existing international competitiveness evaluation theory and systems to give China’s electromechanical products in the U.S. market an in-depth analysis both in structure and competitiveness, and then make a comparison with German, the power in electromechanical products.This paper is intended for evaluating and comparing China and German’s competitiveness of electromechanical products in the U.S. market, thus choosing a reasonable export competitiveness evaluation system is the key question. After comparing the advantages and disadvantages of each evaluation index, this paper first selects market share and ranking and revealed comparative advantage index to give an overall comparison, then gives a structural comparison through product value-added index and export structure sophistication index, and lastly uses constant market share model to analyze China and German’s electromechanical products exported to U.S. respectively in order to test whether the export growth is due to competitiveness effect or other, thus can further evaluate the export competitiveness of China and German’s electromechanical products. Before calculating related indicators, this paper analyzes the competing relationship of China and German using similarity index of export products, and finds that China’s electromechanical products competes with German more and more intensely in the U.S. market. The empirical results show that China’s market share and ranking gradually increased and has overtaken German in the U.S. market, and it changes from a comparative disadvantage to a comparative advantage. The gap between China and German becomes narrow, but China is still lower. From a structural point of view, China’s export of electromechanical products to U.S. does not follow the principle "the higher the value-added, the more the export" very well, and the rationalization of the export structure is lower than German and needs to be improved. Constant market share model analysis finds that China’s electromechanical products competitiveness continues to increase, but the internal structure competitiveness of electromechanical products contributes not largely to overall competitiveness. In addition to competitiveness effects, the U.S. market general demand growth effect on the increase of China’s electromechanical products export also plays an important role, but its contribution is lower than that of German.China’s electromechanical industry utilizes many foreign investments during developing. Its main exporters are foreign direct investment enterprises with processing trade as the main trade mode, thus foreign investment is the main driving force that actually contributes to China’s electromechanical products’high growth speed of export volume and competitiveness. To improve its core export competitiveness, China should take advantage of the opportunities after the financial and debt crisis. With U.S. economic situation improving, the demand for electromechanical products will increase. China should upgrade its electromechanical industry, optimize the export structure, and make efforts to promote its export product structure changing from labor-intensive to both labor-intensive and capital and technology intensive, and increase its export of high-tech and high value-added products.