ABSTRACT
Today “Made in China” is available almost at every corner of the global market, and is occupying increasing market share. What are the reasons for the sudden popularity of “Made in China”? Observers may point to relatively low labor cost as a secret of the success. However, labor in China was even cheaper ten years ago compared with that of today. Why was “Made in China” not popular then? Decomposing China’s exports according to their producers may provide an answer for the rising popularity of “Made in China”. In 2001, exports of foreign-invested firms in China amounted to $133.23 billion, more than 50 percent of China’s total exports (CSB, 2002). It is the first time that the exports of foreign-invested firms exceeded that of domestic firms. From 1994 to 2001, the exports of foreign-invested firms grew on average about 21 percent annually. In contrast, the exports of China’s domestic firms grew merely 6.4 percent, even lower than the growth of China’s GDP (Xing and Zhao, 2003). Unambiguously, foreign-invested firms are a major force driving the robust export growth and promoting the popularity of “Made in China”. Without the contribution of foreign-invested firms, the so-called export-driven growth in China could not be possible.
