This in all probability looks like a foolish query, however it’s really a tough one to reply quantitatively.
The usual measure is the CPI deflated commerce weighted change price, 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 acceptable. Sadly, neither OECD nor IMF report a ULC deflated change 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 (purple), each 2020=100. Supply: BIS through FRED, CEIC.
Word that the ULC deflated sequence for China is for the whole financial 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).
