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Does Stabilizing Foreign Trade Promote Stable Employment

Posted on:2022-02-21Degree:MasterType:Thesis
Country:ChinaCandidate:W X MaoFull Text:PDF
GTID:2519306344970979Subject:Trade Economy
Abstract/Summary:
Since joining the World Trade Organization in 2001,China has taken advantage of the development opportunities brought about by economic globalization to vigorously develop its own economy,attract foreign investment,exchange and develop advanced high technologies,and fully participate in international division of labor and cooperation,thus bringing China’s foreign trade to a new level.At the same time,China has continuously promoted the reform of the industrial structure and has developed from an agricultural country to a country dominated by industrial manufacturing.At present,the manufacturing industry has become a pillar industry of the national economy.In the context of China’s booming foreign trade,as a whole,due to the adjustment of China’s industrial structure and the adherence to export-oriented policies,it has shown an increase in imports of primary products and an increase in exports of industrial products.Based on the analysis of regional differences of foreign trade,it can be seen that thanks to the higher level of economic development and technological progress,as well as due to the wider exposure to the world market,the degree of foreign trade development in the eastern region is significantly higher than that in the central and western regions.At the same time,the impact of global economy fluctuations is more obvious than that in the central and western regions.However,due to the low level of economic and technological development in the central and western regions,and the relatively backward openness to foreign trade,the overall import and export levels are far lower than those in the eastern developed regions.An analysis of China’s employment shows that,as a whole,the number of employees in the country has continued to increase.Although the economic growth rate has slowed due to the impact of the financial crisis in 2008,the country’s employment rate has slowly increased year by year after 2009 thanks to the country’s policy support.However,there are still problems of “labor shortage” and the lack of high-tech talents.At the same time,there are also industrial differences in the changes of employment.The employment scale of the manufacturing industry,which is a pillar industry in the country,has been decreasing year by year in recent years.With the development of economic globalization and technological exchanges,the surplus labor force in the primary and secondary industries has turned to the tertiary industry.From the perspective of the relationship between domestic foreign trade and employment,the annual trend of the domestic manufacturing import and export volume and the number of employees showed consistency.During the financial crisis in 2008,both the import and export volume of the manufacturing industry and the number of employees experienced significant decline.During the economic recovery phase,the scale of the two also expanded simultaneously.Based on the analysis of regional data,it can be known that the annual trend of the domestic manufacturing import and export volume and the number of employment also showed consistency in different regions of China.Therefore,how to expand employment through the development of foreign trade has become an important topic at the moment.Based on the development of China’s foreign trade,this paper uses regression models to study the regional impact of changes in the import and export and China’s employment scale,using data from China’s 30 provinces during the period of 2008 to2018.This paper also selects appropriate control variables such as the average labor wage level,the technological progress level of the manufacturing industry,and the amount of foreign investment,to study its impact on the relationship between import and export and employment.This article first makes a benchmark regression to the model.The regression results show that both import and export have a job creation effect.Exports directly create jobs by driving increased demand,while imports promote the development of upstream and downstream enterprises in the industrial chain,as well as brings foreign technology competition to enhance the competitiveness of relevant domestic enterprises,thereby creating jobs.Following this,this article focuses on dividing China’s provinces into three major regions: East,Central,and West,and make researches on regional differentiation.According to research data,exports have an employment-creating effect on China’s three major regions,and the role of imports in promoting employment is more obvious in the more developed eastern and central regions.For the western regions where the economy and technology are relatively backward,the industrial competition brought about by imports of similar products has a weakening effect on domestic employment.The control variables selected in this article also have impact on employment,which shows regional differences.The average labor wage has played a role in promoting employment in the eastern region,and has played a role in weakening employment in the central and western regions.For the central and western regions with labor-intensive industries as the mainstay,raising wages will bring about the increase in costs which reduces the labor demand of enterprises.For the eastern region,which is dominated by high-tech,the increase in the minimum wage level can promote the flow of factors between employed and non-employed persons,thereby ensuring that employees can enjoy the corresponding welfare,thus increasing its employment rate.Regarding the second control variable which refers to the level of technological development,according to the research data,it can be concluded that in the eastern and western regions,with the increase of technological level labor productivity,the substitution effect of technology and capital on labor becomes stronger,thereby reducing the demand for labor.Considering the third factor which is the foreign investment,in the central and western regions where the development of foreign trade is not mature,job creation directly brought about by foreign investment can drive employment development,and the technology spillover generated in this process can also promote the progress of related industries in the country.For the eastern regions with developed economy and mature technology,foreign investment has a relatively small pull on the region’s economy.Due to the similarity of technology,it will not create jobs or exchange technology as in the central and western regions.Investment in related industries will bring competition to similar industries in the country,thereby affecting employment in related industries in the country.Based on the above research conclusions,under the development of opening up to the outside world,the domestic manufacturing industry should take advantage of the employment stimulating effect of import and export,adapt measures according to local conditions,formulate different foreign trade policies according to the level of economic and technological development of different regions,eliminate regional employment differences,and promote the industrial structure of the manufacturing industry,making it shift from relying on labor to relying on capital and technology,use innovative technologies to improve production efficiency and use foreign capital to expand the scale of the manufacturing industry,so as to create more jobs,thereby pushing the domestic manufacturing industry to a new level.
Keywords/Search Tags:Foreign Trade, Regional Difference, Wage, Technology, Foreign Investment
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