China & World Economy / 104–124, Vol. 23, No. 4, 2015
Is China Relinquishing Manufacturing Competitiveness
to Mexico in US Markets?
Yue Lin*
Abstract
The present paper expands on the understanding of the competition between China and Mexico in US markets. Using the OECD International Trade by Commodity Statistics covering the period 2002–2012, we undertake both relative-market-share analysis and constant-market-share analysis. Through comparison of market share changes at both macro and micro levels, we find that on the one hand China’s total negative impact on Mexican manufactured exports has been greatly reduced since 2007; on the other hand, China is increasingly aligned with Mexico in terms of its competitive position over the US market, consolidating its competitiveness in high and medium-to-high technology products and gaining market share in the US market, mainly at the expense of the most advanced economies. This changing pattern suggests the intensification of competition between Mexico and China, but also a potential for cooperation, with the enhancement of bilateral intra-industry trade as a result of different technology choices and specialization paths.
Key words: China, competitiveness, international trade, Mexico
JEL codes: F14, F20, O14