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The Cost Competitiveness Of Manufacturing In China And India: An Industry And Regional Perspective

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Executive Summary

This paper focuses on comparisons of productivity, (unit) labor cost and industry level competitiveness for the manufacturing sector of China and India. The authors first provide a comparison between India and China using a broad international perspective. They find that China has increased its labor productivity to a level above that of India, but due to a somewhat higher compensation level, China is still somewhat at a disadvantage in terms of unit labor cost in manufacturing relative to India. In the second half of the paper, they make an analysis of industry level differences in productivity, labor compensation and unit labor costs at state and province level in the two countries from the mid 1990s to the early 2000s.

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