Today, developing countries see China's economic growth as a story of lights and shadows. This is because with trade, China's economic growth allows Zimbabwean consumers to enjoy lower prices, but Zimbabwe's domestic products face direct competition from Chinese imports. Low-cost competition from China threatens Zimbabwe's suppliers in the industrial manufacturing sectors of textiles, wood and furniture, paper and chemicals. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay In Zimbabwe, Chinese import penetration impacts industrial production and overall inflation. It has reduced the activities of local businesses (Gebre-Egziabher, 2009). The penetration of Chinese imports affected the industrial sectors in a heterogeneous way and summarizes the inflationary effect of Chinese imports. There is a negative relationship between Chinese imports and inflation as the increase in Chinese imports is accompanied by a decrease in overall inflation. Therefore, Chinese trade is easing inflationary pressures in Zimbabwe. Furthermore, the relationship between different sectoral manufacturing output and Chinese imports is heterogeneous. The increase in Chinese imports is followed by a slight decline in sectoral production. Paper and paper products have proven to be defensive, as they present a distinctive positive relationship, while for chemical products no distinctive relationship can be identified. Chinese import penetration has a negative and significant impact on the wood, furniture and paper industries. This is due to the design rigidity of national companies and dynamic inefficiencies, combined with the inability to respond to the diverse and constantly evolving needs of consumers. The penetration of Chinese imports has a positive effect on the textile industry as most of the textile industries are facing strong competition from low-cost Chinese products. In contrast, the chemical industry has no evidence of existence as Chinese imports have no impact on it. However, a negative and statistically significant effect on inflation is observed. Overall, Chinese import penetration is easing inflationary pressure as Chinese goods are priced low. Please note: this is just an example. Get a custom paper from our expert writers now. Get a Custom Essay First and last, Chinese import penetration has a negative effect on the wood and furniture, paper and paper products industries, and a positive effect on the textile industry. There is no effect of import penetration on the chemical industry. One benefit of import penetration lies in the negative effect on overall inflation as consumers benefit from lower prices and therefore experience a lower cost of living..