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Regression Analyses of Xiamen’s Manufacturing Sector, China

This paper examines the impact of rising wages and falling product prices on the composition of Xiamen’s manufacturing sector in China. Using annual labour surplus (LSR) (Note 1), we show that the pharmaceutical industry and the state owned enterprises are least affected by the twin squeezes (Note 2). We also show that the importance of state owned enterprises has increased at the expense of foreign owned firms in the Xiamen’s manufacturing sector.