The global competitiveness of the Chinese wooden furniture industry

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).