The exotic species Spartina anglica, introduced from Europe in 1963, has been experiencing a decline in the past decade in coastal China, but the reasons for the decline are still not clear. It is hypothesized that competition with the native species Scirpus triqueter may have played an important role in the decline due to niche overlap in the field. We measured biomass, leaf number and area, asexual reproduction and relative neighborhood effect (RNE) of the two species in both monoculture and mixture under three nitrogen levels (control, low and high). S. anglica showed significantly lower biomass accumulation, leaf number and asexual reproduction in mixture than in monoculture. The inter- and intra-specific RNE of S. anglica were all positive, and the inter-specific RNE was significantly higher than the intra-specific RNE in the control. For S. triqueter, inter- and intra-specific RNE were negative at the high nitrogen level but positive in the control and at the low nitrogen level. This indicates that S. triqueter exerted an asymmetric competitive advantage over S. anglica in the control and low nitrogen conditions; however, S. anglica facilitated growth of S. triqueter in high nitrogen conditions. Nitrogen level changed the interactions between the two species because S. triqueter better tolerated low nitrogen. Since S. anglica is increasingly confined to upper, more nitrogen-limited marsh areas in coastal China, increased competition from S. triqueter may help explain its decline.