China Syndrome Redux: New Results on Global Job Reallocation

60 Pages Posted: 18 Nov 2019 Last revised: 23 Nov 2020

See all articles by Difei Ouyang

Difei Ouyang

University of International Business and Economics - School of International Business and Economics

Weidi Yuan

University of Geneva - Geneva School of Economics and Management

Date Written: November 11, 2019

Abstract

Trade between the U.S. and China is widely thought to have contributed significantly to the decline in U.S. manufacturing employment --- sometimes called the China Syndrome. Flipping the point of view, we examine the impact on China of the trade growth between 2000 and 2007: We divide China into prefecture-level cities and construct measures of export exposure based on a city's initial industry specialization and instrument China's export surge using the reduction in trade policy uncertainty. Rising exports do not contribute to any growth of industrial wage or labor productivity on average, but instead channel agricultural, unemployed, and non-participating workers into the industrial labor market and cause rural-urban migration. In our main specification, the loss of one U.S. manufacturing job is associated with eight new Chinese manufacturing jobs through China - U.S. trade links.

Keywords: China Syndrome, Export Growth, Employment, Wage, Labor Productivity

JEL Classification: E24, F14, F16, J23, J31, L60, R12, R23

Suggested Citation

Ouyang, Difei and Yuan, Weidi, China Syndrome Redux: New Results on Global Job Reallocation (November 11, 2019). Available at SSRN: https://ssrn.com/abstract=3330253 or http://dx.doi.org/10.2139/ssrn.3330253

Difei Ouyang

University of International Business and Economics - School of International Business and Economics ( email )

Beijing
China

HOME PAGE: http://sites.google.com/site/ouyangdifei

Weidi Yuan (Contact Author)

University of Geneva - Geneva School of Economics and Management ( email )

Uni Mail
Bd du Pont-d'Arve 40
Geneva, 1211
Switzerland

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