The Effect Analysis Of Wage Growth Rate On Export Competitiveness In China

Along with the development of international trade, international competitiveness of China continuously enhanced. The fast growth of the export trade not only speeded up China’s sustaining economic growth, but also increased the labor incomes. Since the reform and opening-up, export trade has presented a fast-expanding trend. However, the share of labor incomes is getting lower and lower, while export trade and macro-economic are growing rapidly. Based on the former research results, this article discusses the relationship between growth rate of wage and expo rt competitiveness from a dynamic angle.Combining theoretical analysis and empirical tests, this article discusses the impact of wage growth rate on export competitiveness in China. The empirical model based on a panel data with 15 manufacture industrial cross-sections, selects export profit growth rate, real wage growth rate, interest payments, RMB real effective exchange rate index, purchasing price index of raw material, fuel and power, and per capital gross domestic product growth rate in China and America as variables. The time span is 2007-2012. In this process, the article makes description of statistical analysis and eliminates the problems of correlation and multicollinearity. Through Ordinary Least-Squares method, the model evaluates the relationship among variables.The empirical results show that there is a negative correlation between export profit growth rate and real wage growth rate. When the growth rate of real wage is faster than export profit, the added profit cannot make up for the added production cost, which makes Chinese exports less competitive. There is also a negative correlation between interest payments and export profit growth. But the impact is not evident. However, per capital gross domestic product growth rate has a positive impact on export profit growth. Therefore, when the increase of wage costs becomes a fact that cannot be changed, we should improve the labor productivity, to catch up on raised cost and reinforce export competitiveness.