The global competitiveness of the Chinese wooden furniture industry

Published Date
December 2009, Vol.11(8):561–569, doi:10.1016/j.forpol.2009.07.006

Author 

Xiao Han ^a,1,

Yali Wen ^a

Shashi Kant ^b,,

aSchool of Economics and Management, Beijing Forestry University, P.O. Box 425, Beijing, 100083, People's 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 Balassa's 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

• Balassa's revealed comparative advantage
• China
• Competitiveness
• Wooden furniture industry
• World trade

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