Dynamic Comparison On International Competitiveness Of China And South Korea Manufacturing

Manufacturing is an important sector leading the growth of the national economy, its level of development is a concentrated expression of the station. In the manufacturing sectors, South Korea has a "first mover" advantage, in the 1990s it had already entered the stage of de-industrialization. However, while the South Korean manufacturing sectors have high technical level and comprehensive level, because of the shadow of the Asian financial crisis, the manufacturing sectors grow at a low speed. In contrast, China’s manufacturing industry is in the "late comer" status, committed to traditional industries with relatively low technology. But afer the reform and opening up, especially the accession to the WTO, our country’s manufacturing industry takes the rapid development, with great developed vitality. Thus, the study of the gap between the two countries on the international competitiveness of the manufacturing sector and analysis of the reasons for dynamic changes is important to quickly upgrade our manufacturing competitiveness and narrow the gap.Through the method of combination of theoretical and empirical research, the combination of data and model analysis, this paper chooses different indicators to analysis the dynamic gap of manufacturing competitiveness between China and South Korea, and takes empirical analysis of its dynamic changes. Firstly, introduce historical development status of the manufacturing sectors in China and Korea, the shortcomings of the two countries in the industrial development; conduct a comparative analysis in both countries in the development of the industry. The results indicate that manufacturing of South Korea is more competitive than China, but China increase significantly faster than South Korea.Secondly, according to the OECD-WTO database, we have selected four traditional indicators of the manufacturing competitiveness in both countries to measure and compare. And calculate the gap between China and South Korea manufacturing integrated international competitiveness by entropy method; finally, initially analysis the dynamic gaps of them. We find that South Korea’s composite index was significantly higher than China, but the gap is narrowing.Again, we take empirical analysis of the factors affecting the gap of international competitiveness between the two countries. Factors model of the manufacturing competitiveness gap is made to take empirical test, and the factors of analysis are the main factors that influence the size of the individual factors. We found that the gap of exchange rate、the R&D investment accounted for GDP ratio、manufacturing labor productivity、labor costs and fixed capital investment has a significant impact on the competitiveness gap between the two countries.Finally, according to the empirical results, we put forward the reasonable measures to develop China’s manufacturing industry. We shoud try our best to transform the traditional labor-intensive manufacturing industries, to develop the capital and technology-intensive manufacturing, to strengthen international cooperation, to optimize the industrial structure of manufacturing, to speed up our own R&D and innovation, to deepen the tax reform and the RMB exchange rate system reform are of great important.