The Effects Of China’s Export’s Expansion On Employment And Wages

Rapid increasing export recently has made great contribution on China’s economy growth,which has played an important role in international trade,as well.However, the improvement of trade status brings not only respects but also arguments on the effects of China’s exports imposed on other countries. Some scholars assert "China’s threat theory", that is, the growth of China’s trade is the result of other countries’ sacrifice in GDP, employment, and other aspects. Consequently, some countries implement trade protection measures for their local firms, which severely destroyexporting environment, even the healthy development of mutual trade in the long run.In order to explain the effect of China’s export, the paper will use empirical research to analyze the influence of China’s export to Malaysia on labor income and employment growth. The reasons for choosing Malaysia are an important mutual trade partner to China with quiteanaloguein trade structure and a representative fordeveloping countries, which will facilitate to enrich the study as it usedto focus on developed countries.After empirical analysis in Malaysia’s manufacturing firms during the period from 2004 to 2006, the paper finds the following conclusions. Firstly, Malaysia labor wagesarescarcely promoted by China’s import, and there are no significant different effects for different firms in wages. Secondly, as for employment, China’s export has a negative influence on Malaysia’s employment growth. At last, the side-effects vary across firms. Generally speaking, capital-intensive firms with large scale, high productivity may suffer much smaller than other firms.