The Impact Of Increasing Labor Costs On Commodity Composition Of Export

Since the outbreak of the labor shortage in the southeast region of China in 2004, the study on the impact of the rising labor cost on the foreign trade has become a hot issue. Among them, researches about the impact of the rise of labor cost on the commodity composition of export have also been increasing, and scholars have not come to a consistent conclusion. Therefore, this paper will be based on the conclusions of previous studies to explore two questions, including whether the rising labor cost will affect Chinese export commodity structure? If the impact does exit, then what is the way?The first part of this paper discusses the background and practical significance of the research on the rise of labor cost and the structure of export commodities. The second part is to summarize and analyze the research results of the scholars in the past for Chinese labor costs, export commodity structure and the impact of rising labor costs. In this paper, it find that the rise of labor cost can have a positive effect on Chinese export commodity structure. That is, the rising labor cost can promote the optimization of the structure of export commodities in China.The third part is to analyze the Chinese current stage mainly from the perspective of the labor cost and the status of export commodity structure, so as to provide a certain basis for the empirical test below. Based on the macro data, because the cost of labor in our country has been increasing, it is higher than most of the developing countries, such as Philippines and Malaysia. But compared to the developed countries, Chinese labor cost remains at a low level. In the aspect of export commodities structure, labor intensive goods are still in the dominant position in China.The fourth part is mainly to preliminary estimate of the possible empirical results through the establishment of theoretical model to launch an empirical model. The fifth part of this paper is to use OLS and FE with the 2002,2003,2005 and 2006 of the data for empirical testing combined by the customs database and the industrial enterprise database to carry out the empirical result.The empirical results show that rising labor costs is conducive to the increasing export share of Chinese labor-intensive, capital intensive and technology intensive goods. Although from the perspective of the least squares results, due to the rising cost of labor, the export ratio of the labor-intensive and resource-intensive goods exports will be decline. And it does not have a significant impact on capital and technology intensive goods. But the fixed effects results are showed that, after controlling the effect of other factors, rising labor costs may be beneficial to labor-intensive and capital and technology intensive goods exports, and especially to the rising export ratio of labor-intensive goods. Finally, based on empirical the test results this paper will put forward corresponding policy recommendations.Different from the existing researches, this paper mainly makes full use of the large scale micro enterprise survey data, and standardized rigorous measurement analysis methods, which can greatly solve the internal nature of the problem in the previous studies. So this paper can more accurately estimate the impact of rising labor cost on Chinese export commodity structure. The results of the research have a certain guiding significance for the government to formulate policies on export structure adjustment, the improvement of labor productivity and the quality of labor.