Relative competitiveness of 31 mainland China provinces and states of India and ten economies of Association of South East Asian Nations: Implications for growth and development

Abstract

Purpose

The paper is a pioneering attempt to study the relative competitiveness of Association of South East Asian Nations – ASEAN‐10, 31 provinces of mainland China and 35 states of India by disaggregate approach vis‐à‐vis ranking and simulation studies.

Design/methodology/approach

The proposed methodology is based on the standard ranking adopted by the World Competitive Yearbook but redefines a relevant set of data matrix consisting of 101 indicators to better reflect local conditions and characteristics of local economies. Under the proposed methodological approach, the basis of ranking is the standardized value (STD), and first the 31 economies' average for each indicator were computed following which the standard deviation was calculated. STD was computed by subtracting the 31 economies' average from an economy's original value and then dividing the result by the standard deviation.

Findings

The empirical findings revealed the specific shifts in relative competitiveness between China and India over decades and over four different environments, namely economics, government‐institutions, business social categories. It was found that competitive provinces for China are concentrated along the eastern coastal region, whereas more competitive states of India are well distributed across the Indian continent. This implies that the Chinese government needs to play a more pro‐active role in drawing foreign direct investment to less developed western, central and north eastern China by way of infrastructure development, tax incentives and investment in education in those regions. Studies further revealed that Vietnam is a rapid rising economy drawing closer towards Thailand while Indonesia and Philippines are deteriorating within the ten Associate of Southeast Asian Nations. Based on these empirical findings, comparative strategies and cooperation for growth and development amongst China, India and ASEAN were drawn.

Originality/value

The fundamental raison d'être of this study stems from the desire to address an area of research gap previously overlooked. Most international studies on competitiveness rankings to date either ranked economies across the globe and/or by population sizes. One of the critical issues in emerging economies of Asia is the uneven regional development, especially the urban‐rural growth disparity amongst local economies of China and India. Through competitiveness ranking of vast and diverse economies such as China, India and ASEAN‐10.

Citation

Giap Tan, K., Yam Tan, K. and Chen, K. (2008), "Relative competitiveness of 31 mainland China provinces and states of India and ten economies of Association of South East Asian Nations: Implications for growth and development", Competitiveness Review, Vol. 18 No. 1/2, pp. 87-103. https://doi.org/10.1108/10595420810874628