The competitive advantage of labor cost is actually the comparative advantage of labor cost. This report proposes that the comprehensive ratio of unit labor cost could be more reasonable to analyze and judge the competitive advantage of labor cost. Taking an international comparison for the relative level of labor cost of China’s manufacturing，it is found that，since the reform and opening up，China’s manufacturing has always had a certain degree of labor cost competitive advantage，which has weakened recently and faces some risks. In order to realize the goal of China’s development strategy and transformation and upgrading of manufacturing，we can implement a new strategy focusing on improving labor productivity and value-added rate，vigorously improve the level of human capital，strengthen the innovation incentive mechanism，establish and improve the multi-level labor cost monitoring system，to maintain the manufacturing’s competitive advantage of labor cost.