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China's Exports and Employment

41 Pages Posted: 31 Oct 2007  

Robert C. Feenstra

University of California, Davis - Department of Economics; National Bureau of Economic Research (NBER)

Chang Hong

International Monetary Fund (IMF)

Date Written: October 2007

Abstract

Dooley et al (2003, 2004a,b,c) argue that China seeks to raise urban employment by 10-12 million persons per year, with about 30% of that coming from export growth. In fact, total employment increased by 7.5-8 million per year over 1997-2005. We estimate that export growth over 1997-2002 contributed at most 2.5 million jobs per year, with most of the employment gains coming from non-traded goods like construction. Exports grew much faster over the 2000-2005 period, which could in principal explain the entire increase in employment. However, the growth in domestic demand led to three-times more employment gains than did exports over 2000-2005, while productivity growth subtracted the same amount again from employment. We conclude that exports have become increasingly important in stimulating employment in China, but that the same gains could be obtained from growth in domestic demand, especially for tradable goods, which has been stagnant until at least 2002.

Suggested Citation

Feenstra, Robert C. and Hong, Chang, China's Exports and Employment (October 2007). NBER Working Paper No. w13552. Available at SSRN: https://ssrn.com/abstract=1024969

Robert C. Feenstra (Contact Author)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
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University of California, Davis - Department of Economics ( email )

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Davis, CA 95616-8578
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916-752-9240 (Phone)
916-752-9382 (Fax)

Chang Hong

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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