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The gloal competitiveness of the Chinese wooden furniture.doc

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The gloal competitiveness of the Chinese wooden furniture

The global competitiveness of the Chinese wooden furniture industry Xiao Hana, 1, , Yali Wena and Shashi Kantb, , aSchool of Economics and Management, Beijing Forestry University, P.O. Box?425, Beijing, 100083, Peoples Republic of China bFaculty of Forestry, University of Toronto, 33 Willcocks Street, Toronto, Ontario, Canada M5S 3B3 Received 31 December 2008;? revised 13 April 2009;? accepted 27 July 2009.? Available online 5 September 2009. Abstract During the past two decades, the Chinese wooden furniture industry has witnessed high-speed growth, making China a leading furniture exporter. Given the intensification of global competition, it is crucial to assess the present status and competitiveness of the Chinese wooden furniture industry, as well as the changes and challenges China will face in competing with other principal trading nations. Based on Balassas Revealed Comparative Advantage (RCA) Indices, it can be concluded that China has experienced a transition from comparative disadvantage into a high comparative advantage over the period, and has maintained a strong position in this labor-intensive industry. However, it still falls behind traditionally strong competitors such as Italy and Germany in terms of quality and unit price. It is also experiencing a growing challenge from lower-income countries such as Poland and Vietnam. Moreover, China now faces up more unfavorable macroeconomic circumstances such as rising cost, shrinking international demand, technology gap and escalating trade barriers. Thus, the government, industrial association and enterprises need to quickly take innovative steps coordinately to promote Chinese enterprises transitioning from the original equipment manufacturers (OEM) to the original design manufacturers (ODM), further to the original brand manufacturers (OBM). Keywords: Balassas revealed comparative advantage; China; Competitiveness; Wooden furniture industry; World trade Article Outline 1. Introduction 2. Overview o