China syndrome : how the rise of Chinese competition affects SME performance in Canada and the U.S.?

Abstract

This thesis delves into the competitiveness of North American Small and Medium Enterprises (SMEs) in an increasingly global marketplace. It examines how they fare against increased competition from low-wage countries such as China in their local markets. Increased competition is good for the consumer in that it usually leads to greater options in the marketplace as well more efficient processes reflected by reduced market prices (Hatzichronoglou, 1996). However, markets with intense rivalry or which are perfectly competitive turn into a zero sum game in which profits are not sustainable and businesses cannot sustain business. SMEs were found to be more so negatively impacted by Chinese import competition than large firms, and 3-5% more likely to incur bankruptcy due to this import competition.