This most likely looks as if a foolish query, but it surely’s really a tough one to reply quantitatively.
The usual measure is the CPI deflated commerce weighted trade fee, however this makes use of costs related to customers, not producers. And never price of manufacturing. As mentioned in Chinn (2006), unit labor prices (ULC) could be probably the most applicable. Sadly, neither OECD nor IMF report a ULC deflated trade fee for China.
Right here’s CEIC’s estimate in contrast in opposition to the BIS CPI deflated fee.
Determine 1: CPI deflated worth of Chinese language yuan (blue), ULC deflated worth of Chinese language yuan (pink), each 2020=100. Supply: BIS by way of FRED, CEIC.
Be aware that the ULC deflated collection for China is for the complete economic system, not the tradables sector, which might be the suitable one for figuring out competitiveness. For extra dialogue of macro competitiveness, see Chinn and Johnston (1996).
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