On the Correlation between China's Trade Pattern Transformation and Employment Structure in Manufacturing Industry

Ma Guangming; Liu Chunsheng

doi:doi:10.16538/j.cnki.jfe.2016.03.009

Abstract

An asymmetric change appears in China's employment structure in manufacturing industry after 2005.The employment proportion in manufacturing industry reduces significantly in eastern provinces while the proportions do not decrease so fast and even increase somewhat in central and western provinces.Industrial structure, foreign investment, trade size, commodity structure and other traditional research perspectives could not perfectly explain this phenomenon.Through an empirical study based on panel data of manufacturing and its sub-industries of 28 provinces from 2006 to 2013, this paper controls relative variables and endogenous problem, and arrives at the conclusions as follows:the processing trade proportion, which stands for low-end and labor-intensive production mode, is significantly positively related with local manufacturing employment proportion, and traditional labor-intensive manufacturing industries like textile & clothing industries and high-tech products manufacturing industries with high labor-capital ratio like computer, communication, electronic equipment manufacturing & electrical instrumentation manufacturing are the main channels of the effect of processing trade mode on employment structure in manufacturing industry;in addition, in recent years the reduction in processing trade proportion, especially in the eastern provinces, also leads to the rise in the proportion of local skilled manufacturing labor.It provides a new perspective for explaining the change in employment structure in manufacturing industry in China in recent years.Governments in different period of trade pattern transformation are supposed to pay more attention to the influence of processing trade mode on employment structure and adopt differential employment policies.