Introduction The economic growth of China has attracted the attention of many professionals who try to evaluate the long-term implications of this phenomenon. This paper is aimed at examining the competitive strength of international and local firms that operate in China. Furthermore, it is important to discuss the social effects of this economic development. These questions are important because the increasing manufacturing capacity of Chinese firms can affect millions of people throughout the world. Apart from that, this issue can play an important role in international relations. This is why these questions should not be overlooked. Much attention should be paid to such a term as competitiveness which can be defined as the ability of producers to retain or increase its market share (Hong 2008, p. 33). These questions can be examined by looking at the operations of domestic and foreign firms that manufacture their products in China. Overall, it is possible to argue that the competitive strength of these organizations is based on the ability to reduce operational expenses and lower the price for their products. Furthermore, one can identify several impacts such as the improvement of living conditions in China and increased activism in this country. Apart from that, one should speak about the growing unemployment in advanced countries and intense competition in the labor market. Competitiveness of domestic and foreign manufacturing companies While evaluating the performance of Chinese-based firms, scholars focus on several aspects. In particular, the competitive advantage of these organizations relies on the surplus and low cost of labor force (Steinfeld 2008, p. 1971). Additionally, economists believe that the majority of exports from China are not technology-intensive (Zhang 2007, p. 94). In other words, these products are not based on some unique and innovative design that can create extra value for users. Apart from that, these enterprises do not employ technologies that can dramatically increase the volume of production (Zhang 2007, p. 94). More importantly, a significant proportion of Chinese exports are produced by the affiliates of American or European companies that can bring new technologies to this country (Zhang 2007, p. 94). Therefore, manufacturers located in China can be very diverse, but they benefit from the excessive supply of labor. These are some of the main aspects that can be identified. Nevertheless, one should remember that labor-intensive production can often give significant advantage of to Chinese manufacturers. For instance, the prices for Chinese products are lower by 30-50 percent lower than the prices set by American-based manufactures (Pan 2009, p. 9). In some cases, these prices are even lower than the cost of materials in the United States (Pan 2009, p. 9). This is one of the reasons why these organizations can increase their market share. Apart from that, many Western firms decided to move to China in effort to decrease their operational costs. This strategy has been affected by high-tech companies such as Apple, Google, or Nokia that prefer to assemble their products in China. These corporations have indeed