Research On The Impact Of Rising Wages On The Export Competitiveness Of China's Manufacturing Industry

Since the reform and opening-up,China has become “the Factory of the World” with huge trade volume.As the leading sector of the Chinese economy,the rapid development of the manufacturing industry has injected strong power into the growth the national economy.However,the rapid development of Chinese manufacturing industry mainly depends on the advantage of labor cost.With the rising wages,the advantage of labor cost may gradually weaken,and the development of Chinese manufacturing industry will face enormous challenges.Rising wages is accompanied by increases in labor cost and labor productivity.The direction of influence on the export competitiveness of manufacturing industry mainly depends on the difference between labor cost and labor productivity growth rate brought by rising wages.The extend of influence on the export competitiveness brought by rising wages may vary in different factor intensity industries because of different factor input proportion.First,this paper analyzes the current situation and trend of Chinese manufacturing industry wage level,then compares with major developing countries and developed countries.The data shows that wage of Chinese manufacturing industry have risen in recent years.From the perspective of absolute value of wage,the technology-intensive industry has the highest wage level and the labor-intensive industry has the lowest wage level.In terms of wage growth rate,the growth rate of labor-intensive industry is the fastest,followed by technology-intensive industry and capital-intensive industry.Chinese manufacturing industry has lost labor cost advantage compared with some developing countries.But compared with developed countries,the labor cost advantage still exists.Then this paper analyzes the export competitiveness of Chinese manufacturing industry with specific evaluation indicators.The result shows that the export competitiveness of Chinese manufacturing industry has gradually increased.In terms of absolute value,labor-intensive industry has the highest export competitiveness,followed by technology-intensive industry and capital-intensive industry.However,from the perspective of trends,the comparative advantages of labor-intensive industry is gradually decreasing,while the comparative advantages of capital-intensive industry and technology-intensive industry are increasing.The comparative analysis between wage level and manufacturing export competitiveness shows that rising wages has not restrained the improvement of manufacturing export competitiveness.In order to prove this point of view,this paper selects the revealed comparative advantage index as the explained variables,and applies the fixed effect model of panel data for empirical analysis.The results show that rising wages have a positive effect on the export competitiveness of the manufacturing industry and different factor intensity industries,and have a significant effect on capital-intensive and technology-intensive industries.Finally,based on the research of the whole paper,this paper puts forward policy Suggestions from the perspectives of the government and enterprises to maintain and enhance the competitiveness of China’s manufacturing industry in the context of wage rise.The innovations of this paper mainly includes two aspects.First,when studies the impact of rising wages on export competitiveness of manufacturing industry,the manufacturing industry is divided into labor-intensive industry,capital-intensive industry and technology-intensive industry according to different factor intensities.It not only studies the impact of rising wages on the export competitiveness of the overall manufacturing industry,but also studies the impact of rising wages on the different factor intensity industries according to industry classification criteria.Secondly,this paper combines theoretical analysis with empirical research.It not only analyzes the influence mechanism of rising wages on export competitiveness of manufacturing industry from a theoretical perspective,but also applies the latest data to measure manufacturing competitiveness,and comprehensively analyzes the relationship between rising wages and manufacturing export competitiveness from the perspective of empirical analysis.