The rise of China: a new fear of
trade competition for Mauritius?
Baboo M. Nowbutsing and Sonalisingh Ramsohok
Department of Economics and Statistics, University of Mauritius,
Reduit, Republic of Mauritius
Purpose – The relationship between China and Mauritius dates back centuries due to the Chinese
diaspora in Mauritius. The rise of China in the global economy has raised several questions. China is
investing massively in several nations. The question remains whether it is for mutual beneﬁts or the
Chinese quest for world dominance. China is the second top importing partner of Mauritius. However,
the main export destinations of Mauritius remain Europe and the USA. The purpose of this paper is to
address the impact of the emergence of China on the Mauritian economy.
Design/methodology/approach – In order to assess the short-term costs stemming from Chinese
competition, the authors have built two indexes of trade competition. The aim of these indexes is to
compare the exporting structure of China with Mauritius in a particular period of time. If the exporting
structure between two countries is quite similar, then trade competition is more likely. These indexes
are built using the Comtrade database. The indexes are modiﬁed versions of the well-known coefﬁcient
of specialisation (CS) and coefﬁcient of conformity (CC). These two indexes examine and compare the
exporting structure of Mauritius and China to ﬁnally show the degree of trade competition between the
two economies. Further the paper adopts the Engle Granger procedure to assess the impact of import
competition from China.
Findings – Using two indexes of trade competition, it is found that both countries have similar
export structure. The authors presume that it will be impossible for Mauritius to compete with China
mainly because of the latter’s cheap labour advantage and natural resources availability. Further, it
was found that while Mauritius is consolidating its revealed comparative advantage (RCA) in its two
top exporting products, China’s RCA is increasing in those products where that of Mauritius is
decreasing. Finally, it was found that an increase in real GDP per capita will have a positive impact on
Mauritius and there is no relationship between the two countries’ openness.
Originality/value – To the knowledge of the authors, this is the ﬁrst study attempting to assess the
impact of the rise of China on the Mauritius economy. Further, the analyses make use of a both
statistical and econometric analysis to tackle the problem in hand.
Keywords Trade competition, Trade structure, Revealed comparative advantage, China, Mauritius,
Trade, International trade
Paper type Research paper
Mauritius is probably the most agile economy in Africa. Its success has been based
upon its ability to liberalize and diversify away from a single commodity dependent
economy. Mauritius is no longer dependent upon the export of sugar and is emerging
as a successful African economy that has created new growth drivers in tourism,
offshore ﬁnance, trade and increasingly textile and clothing (T&C) manufacturing.
It would not be out of place to characterize Mauritius as the Dubai of Africa.
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JEL classiﬁcation – F10
The rise of China
Journal of Chinese Economic and
Foreign Trade Studies
Vol. 5 No. 2, 2012
q Emerald Group Publishing Limited