It’s not just China’s sheer size that makes competing against its manufacturers so hard — but also the nation’s vast disparity in development.
That’s according to new research from the China Finance 40 Forum, which said China effectively contains multiple economies within one national market. Known as CF40, it’s one of the most influential economic think tanks in China and counts many economic officials as well as prominent economists among its members.
In a report titled “Why Chinese Manufacturing Appears to Compete with All Countries,” CF40 researchers argued the country’s prowess across everything from producing T-shirts to electric vehicles stems from its internal divides rather than state policies designed to give it a competitive edge.
The findings help explain why China’s dominance in global manufacturing across the value chain is proving so hard to combat. On his visit to Beijing this week, US President Donald Trump has prioritized securing big ticket Chinese purchases and stabilizing economic relations, in contrast with last year’s tariff salvos.
China Grabs Bigger Export Share Across the Value Chain Source: CF40 Institute
For years, China has faced calls to allow more currency appreciation and reduce its support for industry as its economic reach extended around the world. The report suggests these prescriptions likely don’t stand a chance.
CF40 makes a case that China’s economy consists of four distinct tiers, each with its own advantages that would render such policy proposals ineffective, since they would do little to reduce the regional income gaps.
Its richest cities, including Beijing, Shanghai, Shenzhen and Guangzhou, have income levels similar to those of Japan and South Korea, while poorer regions still resemble middle- or even lower-middle-income economies such as Mexico, Thailand or Vietnam, they found.
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It’s not just China’s sheer size that makes competing against its manufacturers so hard — but also the nation’s vast disparity in development.
That’s according to new research from the China Finance 40 Forum, which said China effectively contains multiple economies within one national market. Known as CF40, it’s one of the most influential economic think tanks in China and counts many economic officials as well as prominent economists among its members.
In a report titled “Why Chinese Manufacturing Appears to Compete with All Countries,” CF40 researchers argued the country’s prowess across everything from producing T-shirts to electric vehicles stems from its internal divides rather than state policies designed to give it a competitive edge.
The findings help explain why China’s dominance in global manufacturing across the value chain is proving so hard to combat. On his visit to Beijing this week, US President Donald Trump has prioritized securing big ticket Chinese purchases and stabilizing economic relations, in contrast with last year’s tariff salvos.
China Grabs Bigger Export Share Across the Value Chain Source: CF40 Institute
For years, China has faced calls to allow more currency appreciation and reduce its support for industry as its economic reach extended around the world. The report suggests these prescriptions likely don’t stand a chance.
CF40 makes a case that China’s economy consists of four distinct tiers, each with its own advantages that would render such policy proposals ineffective, since they would do little to reduce the regional income gaps.
Its richest cities, including Beijing, Shanghai, Shenzhen and Guangzhou, have income levels similar to those of Japan and South Korea, while poorer regions still resemble middle- or even lower-middle-income economies such as Mexico, Thailand or Vietnam, they found.
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