A great deal of literatures on the com petitive advantages of China manufa cturing enterprises often point to the low cost of labor.However,the au thor thinks this advantage is just co mparative advantage that doesn' t nec-essarily turn into competitive adva ntage and will be eroded as the competitive strategy of transnational com panies direct against Chinese enterprises.Chinese enterprises should attach big importance on human capital,foster dif-ferentiation abilities in research and development,marketing and orga nizational management in their effo rts to gain competitive advantage.