Empirical Analysis Of The Impact Of China’s Strategy Of Labor Market Distortions On The Export Trade

Since China joined the WTO in2001, the export trade of China has grown rapidly.Excluding the price factor, Chinese export has grown at an average of16%from2001to2012.however, with the expansion of trade, China’s trade interests have not increasedaccordingly. The cheap labor resource of China is one of the factors that cause thesituation. Therefore, the purpose of this article is to analyze the influence of labor marketdistortions on export trade. The previous articles analyzed the effect of factor markets’distortion on the export trade and the trade interests, or analyzed the influence of labormarket distortion to the domestic economy. There aren’t papers that research the effect oflabor market distortion on export trade. This paper analyzes the factor marketdistortion-labor market distortion impact on the export trade. Through the analysis of theinfluence of labor market distortions on export trade, it not only has importantsignificance to promote the sustainable and healthy development of export trade, but alsoprovides the dicision basis for development Chinese foreign trade. In addition, Thequantitative analysis of labor market distortions real influence on the growth of exporttrade can not only help explain why export trade interests don’t increases with exportvolume, but also is beneficial to the long-term health of foreign trade development andthe deep reform of national economical system.Firstly, this paper analyzed the relevant theories of labor market distortion andexport trade. Secondly, it analyzed the satiation, cause and the economic effect of labormarket distortion. Thirdly, it studied the effect of labor market distortion on export tradewith the method of the theory-analyses and demonstration-analyses. In theory, on thebasis of the theory of David Ricardo’s Comparative Advantage and Haberler’sOpportunity Cost, the labor market distortion is a comparative advantage in China’sexport trade. In the empirical aspect, C-D production function has been applied in themeasurement of the labor market distortion degree in the25industry from2001to2011.From the results of the assessment, the labor market distortion degree of China’sindustrial sectors present a trend of rising as a whole, caused by China’s political legacyand the dilemma of economic development. Then labor market distortion degree of industries, the capital market distortion degree and foreign capital build panel data tomeasure the influence of labor market distortion on export trade. The result shows thatthe labor market distortion promotes the growth of our country’s export trade.Developing trade is not pursuing the volume of trade, but obtaining more trade benefitsand improving our gains in trade. But, the expansion of the trade scale has beenaccompanied by the deterioration of trade benefits. Then, this paper analyzed therestraints of labor market distortion on the trade benefits. Finally, in response to notsustained growth of export trade caused by labor market distortion, this paper proposedsome countermeasures and suggestions, in order to realize the synchronous growth of ourcountry’s trade scale and trade benefits.