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What does increasing competition from China mean for euro area employment?

Author

Listed:
  • Berson, Clémence
  • Foroni, Claudia
  • Gunnella, Vanessa
  • Lebastard, Laura

Abstract

This box explores the implications of rising import penetration of Chinese products for the euro area labour market. As China advances into high value-added sectors, such as vehicles and specialised machinery, its exports increasingly challenge euro area firms across domestic and third-country markets. Panel regressions, following Autor et al. (2013), show that greater exposure per worker to imports from China is associated with a negative impact on the employment rate. Trade diversion effects arising from elevated US tariffs on Chinese goods are likely to intensify these trends, increasing China’s impact on euro area employment. JEL Classification: E24, F14, F16, J23

Suggested Citation

  • Berson, Clémence & Foroni, Claudia & Gunnella, Vanessa & Lebastard, Laura, 2025. "What does increasing competition from China mean for euro area employment?," Economic Bulletin Boxes, European Central Bank, vol. 5.
    • Handle: RePEc:ecb:ecbbox:2025:0005:2
    Note: 3243564
    as

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    Keywords

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    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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