Policy makers around the world often bring up competitiveness as a central objective of national economic policy, even though they often disagree about the ways to achieve it. The challenge comes from not having a single definition of competitiveness. Policy makers generally think about the competitiveness in two ways: the way it is associated with qualities that enable high standard of living or the way it is associated with locational attributed that drive growth. Regardless of the perspective, the commonly used definition of the competitiveness always has an indirect connection to overall national economic performance.
National Bureau of Economic research in The Determinants of National Competitiveness identifies macro and micro factors that have an effect of country’s competitive performance. Macroeconomic factors such as SIPI (social infrastructure and political institutions) and MFP (monetary and fiscal policy) set general conditions that create opportunities for higher productivity but do not directly like to company productivity or labor mobilization. Together, SIPI and MFP, have medium to long term effect on productivity and economic activity and are generally set or heavily influenced by the national government. 
According to the above report, China’s microeconomic competitiveness (MICRO) and level of SIPI is close to some European countries like Italy, Spain, or Portugal and is significantly higher than that of other developing countries such as India, Russia, or Brazil.  Over the past few decades, China’s rapid economic transformation into a global manufacturing hub has attracted billions of dollars in foreign direct investment and lifted hundreds of millions of Chinese citizens out of poverty. The growth of the Chinese economy has been tremendous. In 2000, china’s GDP was little more than 10 percent of U.S. GDP in 2000 but reached 40 percent in 2010. A report of the U.S. National Intelligence Council projects that by 2030 China will replace the United States to become the largest economy in the world.  It is noted that productivity of employees across countries is closely related to country’s GDP per capita. China’s GDP has been increasing over the past decade is projected to keep increasing in the future, which means that foundational competitiveness of China is likely to increase as well.
Several microeconomic factors have long been seen as affecting company creation and productivity. Amongst them are physical infrastructure, access to capital, quantity and quality of labor and quality of administrative practices.
Physical infrastructure. Brazil, Russia, India and China may all be big markets for multinational consumer product makers, but executives of multinational companies find it challenging to establish new company affiliation in those countries because they require designing unique distribution strategies for each market.
Access to capital. In China, state-owned enterprises control nearly half the economy,...