A Study On The Change Of Trade-induced Cost In The Sino-US Manufacturing During The Financial Crisis

Adjustment cost in the final analysis is the labor market stability. Adjustmentcost is too high, saying the increasing cost on labor force in search of work, relocationand retraining, which will result in reducing the opportunities to get an effective jobin the short-term and increasing unemployment. Therefore, reducing Adjustment costfor increasing employment, stabilizing the labor market is significant. Intra-industrytrade and adjustment cost have a very close relationship, during the current financialcrisis, China and the United States, what will happened on the level of intra-industrytrade? Will the Adjustment costs increase or decrease? What kind of impact will thelabor market be suffered? What kind of factors have contributed to such a shock?In view of the above, this paper bases on the background of the global financialcrisis, revealing the channels of2008financial crisis impacting on China’s foreigntrade and labor market, that what kind of effect did the financial crisis have on China’sforeign trade and labor market and how to effect? Then respectively using G-L indexand marginal intra-industry trade index(MIIT) estimated the Sino-Us manufacturingtrade-induced cost in1993-2009. G-L index results indicate that during the financialcrisis Sino-Us manufacturing trade-induced cost change a little, within10%; Marginalintra-industry trade index shows that during the financial crisis, especially in2009,adjustment costs have apparently changed than before by more than20%-35%.Basingon the calculated results, we analyzed the main factors of resulting in the change ofand combining with the measurement method, did an empirical research the Sino-Usmanufacturing trade-induced cost factors during1993-2009.The result of empiricalresearch indicates that foreign economic dependence，changes in the level of wagesand the level of intra-industry trade are the main trade-induced cost factors during thefinancial crisis. Finally, this paper combined with the “12th five-year plan” puttingforward relevant policies and suggestions, including promoting to carry outintra-industry trade, maintaining steady growth in wages and adjusting the tradestructure.