Study On The Impact Of Labor Cost To Export Trade Of Textile Industry

As a classic labor-intensive industry, textile industry has made a great progress for exporting, solving employment and promoting the economic development in our country. At present, the labor-intensive industry in China has to face the problem of a series of cost rising, particularly the increasing labor costs, which challenges the strategy of overall cost leadership used by China’s companies. This paper studies China’s textile goods trade and labor cost. As textile goods are China’s main export products, and labor costs are an important component of the good’s cost, will the shortage of labor resources and the increase of labor costs affect China’s textile export trade? This thesis will analyze from the theoretical and the empirical aspects. We hope that we can have a further understanding and knowledge of the issue.The first part summarizes the relevant international trade theories and the domestic and foreign research progress about labor costs and the influence of labor costs over textile exports, elaborated from a theoretical level that labor costs are an important factor of China’s textile export trade. The second part analyzes three levels of China’s textile export situation:the export environment background, the export the characteristics, export international competitiveness. China’s textile export is growing constantly, and a series of situations, such as export scale, are breaking through. But at the same time, the textile export trade frictions happen constantly, and it’s becoming more and more serious. As the volume of foreign trade is expanding and growing, China’s textile export has strong competitiveness. But compared with some competitors, China’s textile export competitiveness is with a hidden trouble of the decline. Then the second part of situation focuses on the changes of labor costs and relevant factor:social polarization contradictions, the labor laws, inflation and labor productivity and so on. Our country’s labor costs present a rapid growth trend. When we compare them with the developed countries’labor costs and the international average level, there is also a compared advantage. But compared with Asian major competitors, the labor costs of China have no obvious advantages. Finally, we use empirical analysis, base on the regression analysis, and set up VAR models. Associated with multiple factors, we study the influence of labor costs over textile exports. We can find the influence of unit labor costs over the export price and export volume is more significant.Through the above theoretical and empirical analysis, and base on the research results and policy implications, the suggestions and policy recommendations from the government, enterprise and industry are put forward to help the China’s textile industry in the future. The government should publish some relevant policies for the development of the textile industry, establish a good living environment for the industry, and also guide the textile industry to a healthy development. As the main body of the implementation of the strategy, the enterprises should cooperate with the government’s policy. The textile industry associations should play the function of organization and coordination, help the government in implementing of industry management, and guide the textile industry market to a fast and stable development. The three aspects should cooperate well, and work hard to help the China’s textile industry set up a sustainable competitive advantage in the international and domestic market.