The Competitive Advantage of China Essay Example | Topics and Well Written Essays - 500 words

The Competitive Advantage of China - Essay exampleThe country is ranked very low on considerations of favoritism in administration decision reservation (Rank 43rd), ethical behavior (47th) Intellectual property protection (58th) and auditing and accounting standards (95th). These are artificial constraints and businesses have to be more innovative (manipulative) to succeed.The extent of sophistication of Chinas competitive advantage was quite poor, the country being ranked at 59th on this factor. Its competitiveness is based more on providing cheap labor and natural resources quite a than unique and sophisticated products, technologies and processes.The countrys state owned enterprises and the banking sector are still in deep trouble, government intervention to protect these lead to skewed decisions. Levels of financial intermediation are low and the state has had to step in from time to time to mitigate the adverse effects of a large, non-performing loan portfolio. Added to thi s is the artificially fixed substitution rate that has remained unchanged at 8.28 Rmb/US$ in the period under review. Floating of the Yuan to follow up its market driven level shall have major repercussions on the economy as it likely to consider considerably making Chinese products more expensive and allow competition from other countries.In harm of consumer sophistication China ranked 42nd and only 64th in terms of the extent to which its domestic consumers actively de