The “productivity paradox” of Chinese export firms: Review and assessment

This paper represents an attempt to test the relationship between the exports and productivity of Chinese firms using the data set of nearly 3 million industrial firms in 20 industrial sectors over the period 1998-2007. Our test finds that non-export firms were more productive than export firms, and exports were negatively related to productivity-namely that the lower the productivity of a firm, the higher its exports. This finding is in contradiction with the hypothesis of new-new trade theory. The contradiction is referred to as the "productivity paradox" in this paper. Further tests find that firm size is a key factor affecting firm exports, but the impact of exports on firm productivity is insignif icant. This paper reckons that the "productivity paradox" of Chinese export firms may be attributed to the disproportionate share of processing trade in export trade.

How Are MNCs Readjusting Their Global Strategies in China's Marketplace?

This paper is intended to make a comparative study of MNC subsidiaries in China at different stages. First of all, we built an S-SWOT theoretical framework for MNC Chinese subsidiary strategy analysis. Then, we conducted an empirical analysis of MNC Chinese subsidiary strategies at different periods of time based on the two questionnaire-based surveys undertaken in 2001 and 2005 and a field interview made with such subsidiary executives in 2006. Our study found that MNC Chinese subsidiary overall strategies and functional strategies significantly changed from 2001 to 2006. In particular, MNC Chinese subsidiaries: became increasingly wholly foreign owned and profit oriented; boosted M&A and alliance activities; localized research and development; paid more attention to intangible assets (brand and image) management; coordinated the extent of localization and integration; and assigned key positions to local personnel. We also noticed both a strategic convergence and a considerable strategic difference between the Chinese subsidiaries of MNCs from different countries during the evolution of their Chinese subsidiary strategies.

China's comparative advantage still in low-tech manufacturing sector

This paper represents an attempt to estimate the level of vertical specialization in China's manufacturing industry using China's input-output tables (1995-2005) compiled by the OECD; describe the trends of evolution in the trade competitiveness of China's manufacturing industry using the 1995-2006 trade data of 24 Chinese industries; and examine the key factors affecting the trade competitiveness of China's manufacturing industry in accordance with the analytical framework of Hummels et al (2001). The estimation results indicate that i) the rapid increase in the vertical specialization levels of China's merchandise sectors (especially the high-tech manufacturing sector) has to some extent explained the explosive growth of China's exports (especially high-tech exports) in recent years; ii) there have been no substantive changes in China's comparative advantages. Such advantages are still attributed to the low-tech manufacturing sector. However, the comparative advantage and trade competitiveness of the high-tech manufacturing sector have been on the rise; iii) vertical specialization has signif icantly enhanced the trade competitiveness of China's manufacturing industry. Foreign market dependence, domestic intermediate input intensity and R&D intensity have an obvious promoting effect on the trade competitiveness of China's manufacturing industry.

FAW-Volkswagen’s build-to-order model

This paper represents an attempt to: 1) conduct a systematic analysis of the build-to-order model and concomitant process change FAW-Volkswagen Automobile Co., Ltd. adopted 1 ; 2) elaborate on how Chinese automakers should restructure and improve themselves along the value chain under the build-to-order model in order to acquire new competitive advantages; and 3) modify the value chain under the build-to-order model according to the findings of the case analysis based on a review of value chain and customization theories. This study shows that the build-to-order model is an important way for Chinese automakers to effectively handle the production and market relationship. Order management enables automakers to effectively understand and gauge market demand, reduce inventory costs, reasonably arrange production capacity planning and concentrate on advantageous resources to plan corporate production and operation. Under the build-to-order model, scientific market forecast and time management can be combined with a certain margin of safety in inventory to effectively cope with domestic automotive market fluctuations.