Market competition, green technology progress and comparative advantages in China

Abstract

PurposeTechnical progress is an important technique within improving China’s comparative advantages, as new and renewable technologies will be beneficial for energy security. Productive technical progress and green technical innovation are necessary to improve working conditions and productivity of industries. Therefore, the purpose of this paper is to study technical progress in China under such harsh competitive circumstances, as well as types of technical progress that can be promoted, productive technical progress or green technology progress, and how technical progress will affect China’s competitive advantages.Design/methodology/approachThe authors perform a multi-index multi-factor constitutive model based on a sample of 468 Chinese industries, and divide the industries into four categories.FindingsThe results indicate that there is a “U”-shape relationship between green technology progress and comparative advantages and an inverted “U”-shape relationship between the intensity of market competition and comparative advantages.Research limitations/implicationsChina has crossed the inflection point of the “U”-shaped curve. This, coupled with the slowing of economic growth, demonstrates the need for advocating green technology in China to decrease the pollutant discharge. Establishing Chinese national brands within overseas markets and earning a profit through the downstream of production chain enhance China’s international competitiveness.Originality/valueOne of the most original findings of this paper points out that China is faced with a situation in which exports are severely decreased and domestic environment pollution is increased. Vigorous promotion of green technology progress, improvement of the quality and the technical content of exported products, the establishment of national brand within the overseas market, as well as enhancement of China’s international competitiveness, is needed.