The Impact Of Labor Costs And Productivity On Manufacturing Exports

China became the largest cargo exporting country all over the world in 2013, with the total import and export of Chinese goods trade reaching $ 4.16 trillion. Which exports $2.21 trillion, accounting for the global share of 11.8% of total exports, has been ranked first in the world for five consecutive years. Industrial products has been the main export products of China’s manufacturing industry.Despite the role of international manufacturing factor in past 30 years,foreign companies increased the investment in China and facilitated the technology transfer not only because of the excellent quality of "Made in China".Cheap and abundant labor force is the main reason for China’s manufacturing industry highly favored by foreign companies in the long history.It also contributed to the status that manufacturing industry in China has been the bottom of an ecological chain root. We really want to figure out if China’s manufacturing industry can maintain the original competitive advantage in the international trade with the gradual disappearance of the demographic dividend and the recent claim that US-led Western developed countries put forward in industrialized.In this regard, this article explore the change of manufacturing labor cost comparative advantage by comparing the difference between the manufacturing labor costs and labor productivity at home and abroad,from the theory of comparative advantage as a starting point. With the analysis, the comparative advantage in labor cost is still relatively significant, but there is keen competition of India, the Philippines and other developing countries. With the gradual decline of demographic dividend,the upgrade of the manufacturing sector by increasing labor productivity is imminent.The empirical research of the relation between the labor costs in the manufacturing industry and the export trade shows that unit labor costs have a significant negative impact on trade exports. Furthermore,the enhancing of exchange rate has the same effectTo the contrary,the rise in raw materials, fuel and power purchase index have a significant positive effect.This paper is divided into six parts:the first chapter describes the background, significance, innovation, difficulty, method and framework of the topic. The second chapter describes the theoretical basis of this study and related academic research of manufacturing labor costs and manufacturing exports in detail and makes some a commentary. Chapter Ⅲ analyses the change of manufacturing labor cost comparative advantage by comparing the difference between the manufacturing labor costs and labor productivity at home and abroad. The fourth chapter analyses the trend of manufacturing exports in recent years from the amount and structure of China’s manufacturing exports.The fifth chapter,as the empirical part of this study, with the construction of indicators impact system, calculate the total amount of exports by unit labor costs,which is derived by labor costs and labor productivity,and explains the parameters of each variable. Chapter Ⅳ summarize and propose appropriate policy recommendations based on this research.