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China and the World Economy:A Global Value Chain Perspective on Exports, Incomes and Jobs

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  • Timmer, Marcel
  • Los, Bart
  • Vries, Gaaitzen J. de

    (Groningen University)

Abstract

Based on a new dataset of world input-output tables we analyze the impact of foreign demand on Chinese factor incomes and employment since 1995. We extend the global input-output methodology introduced by Johnson and Noguera (2012) and find that exports of value added rapidly increased after 2001, peaking at 28% of GDP in 2006. During this period the increase in foreign demand added about 70 million jobs, predominantly for unskilled workers. Due to strong domestic inter-industry linkages more than half of these jobs were created outside the manufacturing sector. Foreign demand generated income for domestic capital rather than for labor, as wages remained low. The current global economic crisis strengthens the process of reorientation of the Chinese economy, which appears to have started in 2006 already. Domestic final demand for non-tradables has become the main source of growth and the sources of export income steadily shifted away from mature markets to emerging markets.

Suggested Citation

  • Timmer, Marcel & Los, Bart & Vries, Gaaitzen J. de, 2012. "China and the World Economy:A Global Value Chain Perspective on Exports, Incomes and Jobs," GGDC Research Memorandum GD-128, Groningen Growth and Development Centre, University of Groningen.
  • Handle: RePEc:gro:rugggd:gd-128
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    File URL: http://irs.ub.rug.nl/ppn/356389014
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    References listed on IDEAS

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    1. de Vries, Gaaitzen J. & Erumban, Abdul A. & Timmer, Marcel P. & Voskoboynikov, Ilya & Wu, Harry X., 2012. "Deconstructing the BRICs: Structural transformation and aggregate productivity growth," Journal of Comparative Economics, Elsevier, vol. 40(2), pages 211-227.
    2. Umed Temurshoev & Marcel P. Timmer, 2011. "Joint estimation of supply and use tables," Papers in Regional Science, Wiley Blackwell, vol. 90(4), pages 863-882, November.
    3. Jason Dedrick & Kenneth L. Kraemer & Greg Linden, 2010. "Who profits from innovation in global value chains? A study of the iPod and notebook PCs," Industrial and Corporate Change, Oxford University Press, vol. 19(1), pages 81-116, February.
    4. Robert C. Feenstra & Chang Hong, 2010. "China's Exports and Employment," NBER Chapters,in: China's Growing Role in World Trade, pages 167-199 National Bureau of Economic Research, Inc.
    5. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
    6. Sheng, Liugang & Yang, Dennis T., 2017. "Offshoring and Wage Inequality: Theory and Evidence from China," IZA Discussion Papers 10924, Institute of Labor Economics (IZA).
    7. Rudolfs Bems & Robert C. Johnson & Kei-Mu Yi, 2011. "Vertical Linkages and the Collapse of Global Trade," American Economic Review, American Economic Association, vol. 101(3), pages 308-312, May.
    8. 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.
    9. Barry Bosworth & Susan M. Collins, 2008. "Accounting for Growth: Comparing China and India," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 45-66, Winter.
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    Cited by:

    1. Xiao JIANG, 2015. "Employment effects of trade in intermediate and final goods: An empirical assessment," International Labour Review, International Labour Organization, vol. 154(2), pages 147-164, June.
    2. Liming Chen & Jesus Felipe & Andrew J.Y. Kam & Aashish Mehta, 2018. "Is Employment Globalizing?," Working Papers id:12912, eSocialSciences.
    3. Erik Dietzenbacher & Bart Los & Robert Stehrer & Marcel Timmer & Gaaitzen de Vries, 2013. "The Construction Of World Input-Output Tables In The Wiod Project," Economic Systems Research, Taylor & Francis Journals, vol. 25(1), pages 71-98, March.
    4. Nadia Garbellini & Enrico Marelli & Ariel Luis Wirkierman, 2014. "Domestic demand and global production in the Eurozone: A multi-regional input-output assessment of the global crisis," International Review of Applied Economics, Taylor & Francis Journals, vol. 28(3), pages 336-364, May.
    5. Fujii Gambero, Gerardo & Cervantes M., Rosario & Fabián Rojas, Ana Sofía, 2016. "The labour content of Mexican manufactures, 2008 and 2012," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.

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