Economic Competitiveness of China and the US: Comparison, Dynamic Change and Global Position*

Research of competitiveness of China and the United States is of great significance to enhancing Chinas economic competitiveness and achieving the objective of national rejuvenation. By creating a competitiveness framework and a system of heterogeneous indicators, this paper investigates the competitiveness of China and the US in terms of current status, historic change and global environment. Our research led to the following findings: core factors determine the level of competitiveness for China and the US; the national competitiveness of both countries is evolving towards structural homogeneity; and China and the US lead most countries in many common areas. China has the potential to overtake the US in competitiveness in the foture. We suggest that China increase its competitiveness by promoting its advantages, addressing its weaknesses and focusing on core areas.

Keywords:

national competitiveness, comparison between China and the US, factor heterogeneity JEL classification: N90; 051; 053

DOl: 10.19602/j.chinaeconomist.2017.04.01

1. Introduction

As countries increasingly compete and cooperate with one another in today's world of globalization, competitiveness has become a key topic of research for academia and decision makers. While an economy must stay competitive to achieve lasting prosperity, competition is not a zero-sum game; instead, an economy may derive its competitiveness from cooperation with other economies for win- win results. In formulating a competitiveness strategy to achieve lasting prosperity, it is important to analyze and compare the competitiveness, strengths and weaknesses of different countries, as well as the opportunities and challenges they face.

By launching its reform and opening- up program in its strategic period of opportunities over the past four decades, China has vastly enhanced its economic competitiveness and created a development miracle. In the face of a complex environment, China must keep abreast with the trends and patterns of world development, analyze the key factors in the rise and fall of nations, and formulate a competitiveness strategy based on a proper understanding of its strengths and weaknesses, a strategy that aims to achieve the goal of building a moderately prosperous society in all respects by 2020 and basically achieving modernization by 2050.

The rise of emerging economies is transforming the world economy. For the US as the largest advanced economy and China as the largest emerging economy, their relative competitiveness will greatly shape the pattern of global competitiveness and their own