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China's Exports and Employment

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  • Robert C. Feenstra
  • Chang Hong

Abstract

Dooley et al (2003, 2004a,b,c) argue that China seeks to raise urban employment by 10-12 million persons per year, with about 30% of that coming from export growth. In fact, total employment increased by 7.5-8 million per year over 1997-2005. We estimate that export growth over 1997-2002 contributed at most 2.5 million jobs per year, with most of the employment gains coming from non-traded goods like construction. Exports grew much faster over the 2000-2005 period, which could in principal explain the entire increase in employment. However, the growth in domestic demand led to three-times more employment gains than did exports over 2000-2005, while productivity growth subtracted the same amount again from employment. We conclude that exports have become increasingly important in stimulating employment in China, but that the same gains could be obtained from growth in domestic demand, especially for tradable goods, which has been stagnant until at least 2002.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13552.

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Date of creation: Oct 2007
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Publication status: published as China's Exports and Employment , Robert C. Feenstra, Chang Hong. in China's Growing Role in World Trade , Feenstra and Wei. 2010
Handle: RePEc:nbr:nberwo:13552

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  1. Michael P. Dooley & David Folkerts-Landau & Peter M. Garber, 2004. "The US Current Account Deficit and Economic Development: Collateral for a Total Return Swap," NBER Working Papers 10727, National Bureau of Economic Research, Inc.
  2. Bernstein, Jeffrey R. & Weinstein, David E., 2002. "Do endowments predict the location of production?: Evidence from national and international data," Journal of International Economics, Elsevier, vol. 56(1), pages 55-76, January.
  3. Michael P. Dooley & David Folkerts-Landau & Peter Garber, 2007. "Direct Investment, Rising Real Wages and the Absorption of Excess Labor in the Periphery," NBER Chapters, in: G7 Current Account Imbalances: Sustainability and Adjustment, pages 103-132 National Bureau of Economic Research, Inc.
  4. Claudia Goldin, 2004. "The Long Road to the Fast Track: Career and Family," NBER Working Papers 10331, National Bureau of Economic Research, Inc.
  5. Chen, Xikang & Cheng, Leonard & Fung, K.C. & Lau, Lawrence J. & Sung, YunWing & Yang, C. & Zhu, K. & Pei, J. & Tang, Z., 2008. "Domestic Value Added and Employment Generated by Chinese Exports: A Quantitative Estimation," MPRA Paper 15663, University Library of Munich, Germany.
  6. Michael Dooley & David Folkerts-Landau & Peter Garber, 2005. "An essay on the revived Bretton Woods system," Proceedings, Federal Reserve Bank of San Francisco, issue Feb.
  7. Michael P. Dooley & David Folkerts-Landau & Peter Garber, 2004. "The revived Bretton Woods system," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 9(4), pages 307-313.
  8. David Hummels & Jun Ishii & Kei-Mu Yi, 1999. "The nature and growth of vertical specialization in world trade," Staff Reports 72, Federal Reserve Bank of New York.
  9. Jahangir Aziz, 2006. "Rebalancing China's Economy," IMF Working Papers 06/291, International Monetary Fund.
  10. William D. Nordhaus, 2000. "Productivity Growth and the New Economy," Cowles Foundation Discussion Papers 1284, Cowles Foundation for Research in Economics, Yale University.
  11. Jahangir Aziz & Li Cui, 2007. "Explaining China's Low Consumption," IMF Working Papers 07/181, International Monetary Fund.
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Cited by:
  1. Aizenman, Joshua & Sun, Yi, 2008. "Globalization and the Sustainability of Large Current Account Imbalances: Size Matters," Santa Cruz Department of Economics, Working Paper Series qt2bs193w4, Department of Economics, UC Santa Cruz.
  2. He, Dong & Zhang, Wenlang, 2010. "How dependent is the Chinese economy on exports and in what sense has its growth been export-led?," Journal of Asian Economics, Elsevier, vol. 21(1), pages 87-104, February.
  3. Luigi Bonatti & Andrea Fracasso, 2010. "Global Rebalancing and the Future of the Sino-US Codependency," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 18(s1), pages 70-87.
  4. Rod Tyers & Iain Bain, 2007. "Appreciating the Renminbi," Departmental Working Papers 2007-09, The Australian National University, Arndt-Corden Department of Economics.
  5. Philipp Maier, 2008. "A Wave of Protectionism? An Analysis of Economic and Political Considerations," Working Papers 08-2, Bank of Canada.
  6. Chen, Xikang & Cheng, Leonard K. & Fung, K.C. & Lau, Lawrence J. & Sung, Yun-Wing & Zhu, K. & Yang, C. & Pei, J. & Duan, Y., 2012. "Domestic value added and employment generated by Chinese exports: A quantitative estimation," China Economic Review, Elsevier, vol. 23(4), pages 850-864.

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