This in all probability looks like a foolish query, nevertheless it’s truly a tough one to reply quantitatively.
The usual measure is the CPI deflated commerce weighted trade price, however this makes use of costs related to shoppers, not producers. And never value of manufacturing. As mentioned in Chinn (2006), unit labor prices (ULC) could be essentially the most applicable. Sadly, neither OECD nor IMF report a ULC deflated trade price for China.
Right here’s CEIC’s estimate in contrast towards the BIS CPI deflated price.
Determine 1: CPI deflated worth of Chinese language yuan (blue), ULC deflated worth of Chinese language yuan (crimson), each 2020=100. Supply: BIS by way of FRED, CEIC.
Be aware that the ULC deflated collection for China is for your entire 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).
