China has successfully positioned itself as a key part of the global supply chain over the past three decades. Its share of global merchandise exports was just 4% before its accession to the World Trade Organization in 2001, but it quickly became the world’s largest goods exporter, expanding its market share to 14% by the end of 2015. Despite a subsequent modest decline in its global share, its exports picked up sharply during the COVID-19 pandemic. China’s successful containment measures for the virus allowed production there to recover even as it was being curtailed elsewhere; and Beijing also benefited from its dominance in the manufacture of medical equipment and electronic goods used to work from home.

Using Fathom’s proprietary RiCArdo dataset, we can identify the sectors in which China shows a revealed comparative advantage (RCA). China’s greatest specialism continues to be in manufactured goods, particularly in clothing and accessories and in machinery, as relatively low manufacturing costs, a large domestic market and well-established supply chains all continue to provide China with significant competitive advantages. That being said, China’s edge in the clothing and accessories sector has dwindled since 2010, with its RCA falling from 3.5 to 2.8.

[Please click below to read the full note for analysis of China’s progress with the high-tech sectors of the Made in China 2025 initiative.]