Chinese firms will compete with West in new markets

Significance

They are responding by enhancing their non-price competitiveness through advanced technologies, higher product quality, brand-building and entering high-end segments of global markets.

Impacts

• Cost convergence with China will boost reindustrialisation in the developed world.
• Developing economies such as Vietnam, Indonesia and Bangladesh will occupy the low-cost niche as China vacates it.
• Belt and Road infrastructure will help Chinese firms produce more in developing countries to preserve their cost advantage.