Labor Costs Of China's Manufacturing Exports

This paper studies China's manufactured goods trade and labor costs. As manufactured goods are China's main export products, and labor costs are an important component of the goods'cost, will the shortage of labor resources and the increase of labor costs affect China's export trade? This thesis will analyze from the theoretical and the empirical aspects, hoped that we can have a further understanding of this issue.The first part summarizes the relevant international trade theory, elaborated from a theoretical level that labor costs are an important factor of China's export trade. The second part analyzes three levels of China's manufacturing exports situation:the export profile, the export structure, the structure of manufacturing exports. Industrial manufactured goods export increased rapidly, and are an important part of the China's export goods. Traditional export industries including textile and machinery industries keep steady growth, while electrical and electronic high-tech industry export has rapid expansion.The third part focuses on the changes of labor costs and relevant factors: the labor laws, inflation and labor productivity. Compared with India and Vietnam, China has a faster growth of employed population, higher labor productivity. Comparing the wages of manufacturing sub-sectors, we can see that the degree of technological content of products determines the wages of industries.Finally, we use empirical analysis, base on the regression analysis, and set up VAR models. Associated with multiple factors, we study the influence of labor costs over manufacturing exports. We can find the influence of unit labor costs over the export price and export volume is more significant.Through the above theoretical and empirical analysis, the suggestions and policy recommendations are put forward. China needs to change the path of economic development, cannot rely on exports anymore. It should expand domestic demand actively; promote the upgrading of industrial structure and increase employee training to enhance the competitiveness of the manufacturing sector. Enterprises need to focus on the industrial upgrading, change the mode of production, enhance the ability of independent research, and improve labor productivity.This paper's innovation is distinguishing different categories of export products by technology structure, comparing the export products' constitution and technology change which make up a large proportion of export products. Then we analyze the condition of labor costs in these industries to research the relationship of products'technical content and industry wage. In addition, according to China's actual situation that labor productivity rises faster, we use unit labor costs instead of wage as a measure of the variable of labor costs, combined with multivariate regression analysis. In previous studies, most empirical analysis models were done from the perspective of a single factor.Because of the data conditions and limited level of the writer, this paper's analysis is still superficial and having omissions, waiting to be amended perfect. In the case of condition, we want to discuss unit labor costs and industry exports in the manufacturing sub-sectors more in-depth.