The Impact Of Exchange Rate Movement On Manufacturing Employment In China

Exchange rate, using to measure the purchasing power,is one of the most important indexes affecting the competitiveness of both domestic and foreign commodities. The adjustment of exchange rate will affect the relative price of both domestic and foreign goods, and thus make a change to the import and export scale of one economy, causes the enterprise to reduce or enlarge the scale of production, which will lead to the re-allocation of the labor market, thereby affecting the entire economy. Combined with the actual situation in our country, the exchange rate appreciation pressure and unemployment exist at the same time, While the manufacturing industry is one of the largest industry of absorbing labor, to investigate the change of RMB exchange rate on manufacturing employment effects has great theory meaning and realistic meaning.Through summarizing the domestic and foreign research results, this paper makes a systematic exposition on exchange rate theory and the influence mechanism of exchange rate fluctuations on employment.. Most of the previous researches of the RMB exchange rate on the employment effects mainly concentrate in the macro field, or take the manufacturing industry as a whole; there are rare studies on the specific manufacturing industry. Therefore, in order to study the influence of RMB exchange rate on the employment of manufacturing industry better, this paper firstly makes use of time series data analysis of the impact of exchange rate on the total manufacturing employment, and then selects the employment data of24segments of manufacturing from2000to2011, using panel data model to do the empirical analysis.The empirical results show that:the appreciation of the renminbi will reduce the total manufacturing employment, but the impact on different industries is different. The appreciation of the renminbi would significantly reduce the labor-intensive manufacturing industry employment, and the effect is greater than the overall manufacturing industry. Employment of capital intensive manufacturing industry and technology intensive manufacturing is positively related to the RMB exchange rate, but is not statistically significant. In the end, put forward the targeted policy suggestions according to the analysis of the empirical results.